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[Editorial] Chaebol bashing

It is an improvement if the current chaebol bashing by politicians of both the ruling and opposition camps signifies their independence from corporate influences. It is rather less reassuring, however, if our lawmakers choose the targets for their verbal assaults as a political ploy to chase votes.

Grand National Party members have become harsher in their criticism of conglomerates for making profits at the expense of small firms and transferring assets to offspring through various tax avoidance methods. The ongoing campaigning in provincial cities by the candidates for the GNP chairmanship has featured bitter anti-chaebol tirades of a kind never heard from the conservative party before. Nam Kyung-pil drew wild applause at a rally in Changwon on Saturday when he lambasted conglomerate heads, specifically Federation of Korean Industries chair Huh Chang-soo, as “audacious and greedy.”

Behind the leadership competition ahead of the crucial July 4 national convention, the GNP’s policy-making committee has been drafting a set of policies focused on economic justice. Clearly perceiving the widespread public disapproval of the conglomerates’ expansion into the traditional territories of small businesses, the committee is reported to be preparing a set of stiff regulatory bills. One draft bill specifically targets conglomerates’ giving maintenance contracts to firms they have special relationships with.

These moves originate from President Lee Myung-bak’s economic mantra of shared growth by large and small businesses. As the policy committee draws up strategic plans ― including a halt to the tax cut for the rich ― the party’s leadership contestants are lining up to take on conglomerates. Rep. Chung Doo-un compared the style of inheritance of chaebol wealth to the dynastic power transfer in North Korea. He vowed to fight the nepotism within large business groups, which he said causes “the breakdown of the grassroots economy.”

In recent days, FKI chair Huh, who heads GS Group, has provided fodder for the GNP’s onslaught on conglomerates by making a series of critical comments on the government’s and the ruling party’s socio-economic policies. He opposed the withdrawal of a corporate tax cut, arguing that it went against the global trend as it deters enterprises from increasing employment and investment.

Huh branded the university tuition cut proposals from political groups as a populist offering prepared “recklessly” ahead of next year’s elections. He expressed general skepticism about the various policy measures being studied to support medium and small businesses. “We are gravely concerned about whether our government follows pure and clear principles considering the future of the nation in making major policy decisions,” he told Strategy and Finance Minister Bahk Jae-wan.

Lawmakers from both camps are responding to chaebol’s perceived audacity with an equally audacious action. The Assembly Knowledge and Economy Committee requested the presence of the chiefs of the FKI and three other major economic and trade organizations to a hearing on “win-win cooperation” between large and small businesses on Wednesday. If they send their proxies to the session, the committee said it would issue summonses to them for a parliamentary probe into conglomerates.

By now people are utterly confused about who is on which side. For some time they have witnessed parties emulating each other’s welfare policies and they are now hearing unlikely remarks from the members of a party that launched a new administration three years ago with blatant market-friendly, business-friendly policy statements.

The change may be attributed to the increasingly egotistic business practices of conglomerates for their goal of surviving the global economic crisis. Samsung chairman Lee Kun-hee’s rather ungenerous score ― “barely avoided flunking” ― for the Lee administration’s performance on the economy could have embittered the ruling camp.

The recent exchanges of hard feelings between the ruling group and large businesses are simply detrimental to national health. The GNP front-runners need to make a closer calculation of how many tradionally left-leaning voters they can attract with their chaebol bashing without alienating their loyal conservative supporters who still appreciate the contributions of Samsung, LG, Hyundai and SK despite all their business improprieties. Calm and restraint is recommended for both sides for the sake of the national good.