[Friday Story] The 4-Year Cycle of 'Kim Jong-in Economic Democratization' Arrives... This Time?

2012 Saenuri Party - 2016 Democratic Party - 2020 People Power Party
Government and Ruling Party's Proposed Amendments to Commercial Act and Fair Trade Act, 'Key Tasks' from 4 Years Ago

[Asia Economy Reporter Park Cheol-eung] "Economic democratization is explicitly stated in the constitution, so does that mean our constitution is a socialist constitution? Upholding the constitution is the foundation of conservatism, yet these people are fake conservatives who don't even properly understand our country's constitution."

This is an excerpt from the memoir published by Kim Jong-in, the Emergency Committee Chairman of the People Power Party, last March. It was a sharp criticism of party members who opposed economic democratization when he was part of the Saenuri Party in 2012.

Although Chairman Kim has shown a political trajectory moving between the Democratic Party and conservative opposition parties, his conviction regarding economic democratization has remained unwavering. Whenever he takes center stage in politics, economic democratization becomes a hot topic of the era. The "Kim Jong-in style economic democratization" appears every four years, and this is the third time.

It is somewhat natural that he expressed agreement with the government's and ruling party's "Fair Economy 3 Laws"?the amendments to the Commercial Act, the Fair Trade Act, and the Financial Group Integrated Supervision Act?because they closely resemble the economic democratization content he proposed during his tenure as the head of the Democratic Party's Emergency Committee in 2016.

Earlier this year, he mentioned, "I was completely deceived by two people (former President Park Geun-hye and President Moon Jae-in)." He criticized former President Park for not fulfilling her pledges after taking office and the Moon Jae-in administration for lacking will. Before leaving the Democratic Party in March 2017, Chairman Kim told reporters, "Among the members of the Democratic Party, there are very few who are passionate about economic democratization."

Now, the Democratic Party, which holds an overwhelming number of seats, is emphasizing economic democratization bills, and the People Power Party has also reflected economic democratization in its new platform. For Chairman Kim, this is an opportunity to realize a lifelong conviction and aspiration. From a personal perspective, this can be seen not as a "political turncoat" seeking power but as a move to actualize policy beliefs. Above all, it allows for a reversal of his previously "deceived" political activities.

The urgent concern lies with the business community. The business sector has consistently argued that economic democratization policies infringe on companies' autonomous management activities and ultimately dampen the vitality of the national economy. On the 16th, six organizations including the Federation of Korean Industries (FKI), Korea Federation of SMEs, and Korea Employers Federation issued a joint statement saying, "If the amendments to the Commercial Act and Fair Trade Act pass, threats to corporate management rights will increase, and funds that should be used for investment and job creation will be wasted on unnecessary share acquisitions, causing serious side effects." They added, "These Galapagos-style regulations, which do not align with global standards, will weaken the global competitiveness of our companies and seriously harm the national economy."

The day before the statement, on the 15th, Kwon Tae-shin, Vice Chairman of the FKI, visited Chairman Kim to express this position. The business community hopes for the principles of the existing conservative party that opposed corporate regulations, but judging by Chairman Kim's views on corporations, he is resolute. In an interview with Asia Economy on the 14th, when asked about corporate opposition to the amendments to the Commercial Act and Fair Trade Act, he dismissed it by saying, "Companies always have people who say such things," and "What can a politician do by listening to companies?"

He has also openly expressed negative views about the FKI. In October 2016, attending a forum titled "Why is the FKI a problem?" held at the National Assembly, he criticized, "It is hard to find any positive function of the FKI," and "Despite its enormous economic power and participation in the government's legislative process, it does not contribute to social harmony or rational growth." He also said, "The past International Monetary Fund (IMF) crisis happened because the government was misled by their sweet talk and pursued wrong policies."

He has directly criticized "the greed of conglomerates." In the 2013 publication "Asking 14 Mentors of Economic Democratization," Chairman Kim said, "Regarding the greed of conglomerates, we must first stop the destruction of jobs before even talking about job creation." This was in criticism of large corporations entering neighborhood markets.

In an interview with Asia Economy, he cited American economist Joseph Schumpeter, famous for the "theory of creative destruction," emphasizing, "A company that pursues profit while abiding by laws and customs set by the state is the most patriotic company." Schumpeter is a scholar who emphasized profit creation through entrepreneurial innovation, and Chairman Kim seems to focus on profit pursuit within the framework of economic democratization.

Whether Chairman Kim's economic democratization theory will gain consensus at the party level of the People Power Party remains uncertain. There are still many within the party who view it as strengthening corporate regulations.

Kim Byung-min, a member of the People Power Party's Emergency Committee and former chairman of the Special Committee on Party Platform Revision, told Asia Economy in a phone interview, "Chairman Kim has continuously strived to implement economic democratization as stated in the constitution, regardless of his party affiliation," adding, "Sufficient discussions with party members are necessary. After proposing basic income, we have seen a process where opinions within the party gradually converge over time." He further said, "Changing the party name to People Power Party was not to represent a specific support base or faction but an expression of the will to proceed with matters that benefit the majority of the people."

Currently, many economic democratization bills proposed by the government and the Democratic Party are awaiting in the regular National Assembly session. These are almost identical to the pledges Chairman Kim made four years ago, or even eight years ago. During his tenure as head of the Democratic Party's Emergency Committee in 2016, he presented 34 key economic democratization tasks to be promoted.

Representative among these are amendments to the Commercial Act such as the multiple derivative lawsuit system, cumulative voting system, and separate election of audit committee members. Although the cumulative voting system is not included in the current government-proposed bill, Chairman Kim advocated for even more advanced measures. It is noteworthy that Park Yong-jin, a Democratic Party lawmaker who served as Kim's secretary during his time as Democratic Party leader, is currently advocating for the introduction of the cumulative voting system.

The abolition of the exclusive right of prosecution by the Fair Trade Commission, which the business community fears will lead to excessive lawsuits, is also one of Chairman Kim's convictions. Punitive damages, class-action lawsuits, expansion of performance-sharing systems between large and small businesses, strengthening franchisee protection, and tightening regulations on large complex shopping malls are all aligned with his stance.

Regarding this, Committee Member Kim said, "Additional Kim Jong-in style economic democratization policies may emerge in the future."

▲ Candidate Park Geun-hye and Kim Jong-in, Chairman of the Saenuri Party National Happiness Promotion Committee, during the 2012 presidential election

This content was produced with the assistance of AI translation services.