[New Year's Address] Korea Employers Federation Chairman Sohn Kyung-shik "Wishing for a New Year that Breathes Vitality into the Private Economic Sector"

2021 New Year's Address "Next Year's Economic Situation Not Easy"
"Legislation Needed to Restore Entrepreneurial Spirit and Investment Sentiment"

[Asia Economy Reporter Kiho Sung] Sohn Kyung-shik, Chairman of the Korea Employers Federation, emphasized on the 30th, marking the New Year, that "in order for our economy to achieve sustainable growth amid increasingly difficult management conditions, it is a prerequisite task to invigorate the private economic sector."

In his 2021 New Year's address, Chairman Sohn said, "The past year 2020 was an extremely challenging year as the entire world experienced an unprecedented crisis due to the unexpected novel coronavirus infection (COVID-19) pandemic."

He stated, "In the new year, COVID-19 is expected to persist for a considerable period, and the global trend toward protectionism is likely to strengthen, so the difficulties felt by companies remain high. Moreover, domestic policy environments are progressing in a direction that increases burdens on corporate activities, exacerbating difficulties in industrial sites. In addition to the sharp deterioration in the management environment caused by rapid minimum wage increases and reduced working hours over the past few years, numerous legislative bills restricting corporate management activities, such as amendments to the Commercial Act, the Fair Trade Act, and the Labor Union Act, were enacted last year. There is growing concern that under these worsening conditions, investment and job creation will shrink, and the economic vitality of the private sector will decline," he forecasted.

To overcome this situation, Chairman Sohn said, "Above all, we must firmly guarantee the ‘market autonomy principle’ that promotes creativity and innovation among private economic agents to create a strong growth engine. In that regard, in the new year, we must start overcoming the current economic crisis by supporting a ‘stable institutional environment’ where private economic agents can focus on economic activities with confidence about the future."

He added, "First, a revolutionary shift toward policies that improve the business environment and boost investment sentiment is necessary. Regulations that hinder companies' creative management activities must be significantly eased. Considering that competing countries are easing corporate tax burdens, we must create a competitive corporate tax environment. Regarding inheritance tax, which has been discussed for some time, efforts should be made to significantly reduce it to support the recovery of entrepreneurship and investment sentiment," he proposed.

He continued, "Regarding additional regulatory legislative initiatives such as the introduction of class-action lawsuits, strengthening punitive damages, and the enactment of the Serious Accident Corporate Punishment Act, I hope they will be carefully reviewed over a considerable period, taking into account industrial and economic impacts. Also, for the Commercial Act, Fair Trade Act, and Labor Union Act passed by the National Assembly last year, I urge meticulous policy consideration to secure at least minimal coping capacity for companies by pursuing follow-up supplementary legislation," he emphasized.

He also noted, "In the 2019 World Economic Forum (WEF) national competitiveness evaluation, South Korea ranked 130th out of 141 countries in labor-management cooperation, indicating that we have not escaped adversarial and conflictual labor-management relations. I believe it is now time to expedite labor market reforms."

Chairman Sohn pledged, "This year as well, the Korea Employers Federation will do its best to propose alternatives that can enhance private economic vitality and lay the foundation for sustainable economic growth through cooperation among economic agents. Externally, we will broadly survey the global competitive environment for companies, and internally, we will closely examine various improvements related to corporate competitiveness, regulations, industry, labor environment, and public awareness of corporate and economic issues."

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