[Inside Chodong] Let This Be an Opportunity for Business Groups to Unite, Not Compete for the ‘Eldest Brother’ Title

[Asia Economy Reporter Park Sun-mi]"The government's role is to remove obstacles that hinder companies from operating freely. Please continue to advise us on what these obstacles are."

On the 21st, President-elect Yoon Seok-yeol met with the heads of six economic organizations and made market- and business-friendly remarks. For the economy to transform from government-led to private sector-centered, companies must grow, and the government will actively support this by removing obstacles. He also asked for the economic leaders’ generous advice.

Since the presidential election, economic organizations that sought meetings with President-elect Yoon have welcomed his attitude of listening attentively to the voices of the business community. Notably, before meeting the heads of major conglomerates, he first gathered the heads of economic organizations, assigning them roles and highlighting regulatory reform?one of the key difficulties faced by companies?as the top priority in the economic sector, which is encouraging.

However, the participation of the Federation of Korean Industries (FKI), which had seen its scale, status, and role all diminished over the past five years, and its leading role in organizing the initial meeting, sparked controversy. Inside and outside the business community, some interpret this as a sign of the FKI’s revival?a symbol of collusion between politics and business that nearly led to its dissolution?while others express concern that a power struggle has begun among economic organizations to claim the title of the ‘eldest brother.’

The FKI was established in 1961 as a purely private comprehensive economic organization by the voluntary will of private businesspeople. At that time, Chairman Lee Byung-chul of Samsung Group modeled it after Japan’s Keidanren and gathered large corporations to form it. Article 1 of its bylaws states its purpose as promoting a free market economy, implementing sound economic policies, and advancing the internationalization of the Korean economy.

Representing large corporations, the FKI’s status plummeted during the 2016 Choi Soon-sil political scandal when it was exposed as a channel for corporate fundraising and a link in political-business collusion. Over the past five years, it was never invited to official Blue House events, excluded from overseas trips and meetings among economic organization heads, leading to the term ‘FKI passing.’ Major member companies such as Samsung, Hyundai Motor, SK, and LG left one after another, causing the FKI to lose its symbolic status in the business community, while its budget and personnel shrank to about half of what they once were.

Nevertheless, the FKI still has a clear role to play for the new government. Having long maintained exchanges and built strong friendships with economic and political circles in various countries, its international network remains a strength. In fact, the FKI played a crucial role in the implementation of the Korea-US Free Trade Agreement (FTA), which strengthened the economic alliance between the two countries.

At the 13th Korea-US Business Council meeting in 2000, the FKI was the first to raise the necessity of the Korea-US FTA and worked comprehensively with Korean companies for the economic development of both countries. Even when Korea-Japan relations rapidly cooled due to Japan’s export restrictions in 2019, the FKI maintained exchanges with the Japanese business community and worked to restore private-sector relations. The FKI’s experience can help the new government expand economic cooperation and promote goodwill with other countries. Huh Chang-soo, chairman of the FKI, also emphasized in his meeting with President-elect Yoon that the FKI will do its part in improving strained Korea-Japan relations and strengthening ties with the United States and the European Union (EU).

Other economic organizations that have represented the business community over the past five years may feel uncomfortable with the FKI’s revival. However, with the spread of COVID-19 and uncertain global conditions, both the new government and companies must be fully alert and work together to overcome challenges. Rather than ranking economic organizations by precedence, the urgent task is to effectively convey the voices of the business community and collaborate to overcome difficulties. We hope that the strengths of each economic organization will serve as a strong support for the growth of our economy.

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