+ A

A diktat economy (KOR)

Jan 23,2020
The Blue House has stirred controversy — once again — after one of its top officials summoned heads of the top five local business groups and demanded they come up with appropriate items for joint businesses. Such an anti-market and anti-business approach reminds us of authoritarian governments of the past — and beyond our shores. We wonder how far this government can go in trying to dictate economics and business decisions.

In the meeting in Seoul on Monday, leaders of the five largest conglomerates — Samsung, Hyundai Motor, SK, LG, and Lotte — were called. They received an invitation from Kim Sang-jo, head of the Policy Office at the Blue House. He organized the meeting to listen to the business leaders’ reaction to his earlier demand for possible joint ventures. That sounds not so bad. He offered to provide them with trillions of won, or billions of dollars, in government funds if they look for lucrative growth engines — such as semiconductors — and jointly invest and develop them.

In reality, that proposal is absurd. Companies draw up their strategies independently and clandestinely. Hasn’t the government ever seen the heated legal battles between Samsung and LG over patent rights? Companies can maximize their profits based on their own products. Even in state-led economies like China and Russia, governments respect the rules of free competition in the private sector.

Moreover, it is not right for a senior Blue House official to call company heavyweights to a meeting and instruct them to present business ideas in a domineering way. Large Korean companies are increasingly reluctant to invest not because of a lack of money but because of an abundance of stifling government regulations whenever they attempt to launch a new business befitting the era of the fourth industrial revolution. To make matters worse, the liberal administration has allowed the National Pension Service, which holds a large stake in a number of local companies, to step in their managements. As a result, major companies are struggling to protect their basic rights to run their own businesses.

In such circumstances, our economy cannot escape a long slump. We wonder if the government does not realize the simple fact that our abysmal growth rate of 2 percent last year resulted from a dearth of investments from the private sector. What the government must do is deregulate, not dictate. We wish Kim would devote his energy to his job as a presidential secretary instead of trying to run businesses.

JoongAng Ilbo, Jan. 23, Page 26