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Mixing business and politics

July 16,2019
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President Moon Jae-in meets with leaders of the 30 largest business groups at the Blue House July 10 to discuss ways to tackle Japan’s restrictions on three materials needed to produce semiconductors and displays. [YONHAP]
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Yi Jung-jae
The author is a columnist of the JoongAng Ilbo.

Kim Hyun-chul, President Moon Jae-in’s former secretary for economic affairs, is a Japan expert. He received a Ph.D. from Keio University and worked as a researcher at Japan’s Ministry of Economy, Trade and Industry. He advised Nippon Steel Corporation and Nissan Motors. President Moon knows his career well. While they did not have any connection to him, Moon wanted to meet Kim after reading his book, “How to Break Through the Low Growth Age.” The book included many cases studies of Japanese companies. The president was impressed by his economic knowledge and action-oriented plans. Kim was the one who coined the word “J-nomics.”

In a media interview a week ago, he said the government should not put companies at the front, adding that if the Blue House meets with companies openly, it would not help solve the problem. He advised that politics and the economy should be kept separate in Korea. Experts in Korea-Japan relations generally share the view. When politics and economy are separate, there can be room for bilateral relations to return for the economy even when politics become irreversibly heated.

There must be a reason for Kim to make such a comment shortly before the Blue House meeting with heads of 30 largest companies. He, too, didn’t expect the meeting to be canceled. Instead, he may have hoped that the companies would not be highlighted. However, the meeting took place, and rather than separating politics and economy, the two became tied. I think the meeting was not right for at least five reasons.

First, companies were used as shields in the economic war. President Moon asked for cooperation of the conglomerates as the government efforts were not enough and companies were pushed to play a central role. Politics and diplomacy are to blame, yet the economy is taking responsibility. The meeting is also not compatible with Moon’s usual anti-corporate policy and hostile stance towards conglomerates.

Second, the bridge has been burned. The president underscored the importance of changing an industrial structure so heavily reliant on a particular country. He promised budget and tax benefits. Every word is right, but it sounds like a declaration of a war given the timing and place. As the heated diplomatic and security war is likely to get worse, he eliminated the possibility of reconciliation and cooperation.

Third, if things go wrong, conglomerates may have to take the blame. The government connected with companies to share the responsibility. Some analysts even hypothesize that it was an advanced tactic to blame Japan and conglomerates in the general election next year in the face of a struggling economy.

Fourth, I suspect the sincerity of the meeting. If they want to hear honest voices, why was the Federation of Korean Industries not included? Is it because they were associated with what the government calls deep-rooted evils? Is it to affirm the Blue House’s fundamentalism? When the president demands them to march forward, which businessman can refuse? Why was he so determined when it came to Japan but has been less so when it comes to United States, China and North Korea? Was it a judgment call or due to anti-Japanese nationalism?

Fifth, the order and target are wrong. The CEOs should not be called first. Instead, he should have sought cooperation and help from Japan experts, victims of the forced labor, fundamentalist civic groups and judiciary experts, including a judge who made the initial ruling.
As the meeting was misguided, businesses grumbled that it would be better to solve it diplomatically.

JoongAng Ilbo, July 12, Page 30