[Economic Organization Shin Ji-hyung Road] History of Competition and Cooperation... "Must Pioneer Independent Activity Areas"

Ambiguous Boundaries Between 'Sangui-Jeongyeonryeon'
Overcoming Past Political Collusion Remains a Challenge

[Image source=Yonhap News]

[Asia Economy Reporter Oh Hyung-gil] The People Power Party announced a joint declaration with the Federation of Korean Industries (FKI) on the 6th to support new industries such as semiconductors and future cars and to innovate regulations. At the event, Sung Il-jong, the policy chief of the People Power Party, emphasized, "We share the vision of building a future paradigm under the Yoon Seok-yeol administration and will back measures to support advanced industries like semiconductors, which are future growth engines." This move is seen as choosing the FKI as the economic policy partner of the Yoon administration.

The FKI's role is also prominent in Korea-Japan business cooperation, which had been delayed due to the COVID-19 pandemic. On the 4th, the FKI held the Korea-Japan Business Meeting with Japan's Keidanren (Japan Business Federation) for the first time in three years. At this meeting, they agreed to cooperate on economic collaboration and improving relations between the two countries, including efforts toward realizing a sustainable society.

Since the launch of the Yoon Seok-yeol administration, the FKI's role and voice have been gaining strength again. There are also speculations that the role of the Korea Chamber of Commerce and Industry (KCCI), which represented the business community's voice during the previous administration, may be reduced.

However, there are also criticisms that the FKI faces many hurdles before regaining its past status as the "eldest brother" of the business community. The KCCI, whose role is growing as business leaders consecutively take on the chairmanship, is considered an immediate competitor. The subtle competition between the FKI and KCCI for leadership in the economic sector is an ongoing issue.

Huh Chang-soo (third from the right), Chairman of the Federation of Korean Industries, along with key attendees, are taking a photo at the "Korea Entrepreneurship Renaissance Forum" held on the 14th at the Federation of Korean Industries building in Yeouido, Seoul. Photo by Kang Jin-hyung aymsdream@

At the New Entrepreneurship Declaration Ceremony held on the 24th at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul, attendees including Choi Tae-won, Chairman of the Korea Chamber of Commerce and Industry (third from the left in the front row), and Son Kyung-sik, Chairman of the Korea Employers Federation (fourth from the left in the front row), are posing for a commemorative photo. Photo by Kim Hyun-min kimhyun81@

Overlapping Member Companies and Similar Roles: "Do We Need Two Suns?"

The roles of the legally recognized economic organization KCCI and the purely private organization FKI have recently been overlapping repeatedly. Although they conduct independent projects, their areas are gradually disappearing, leading to intensified rivalry.

This month, both KCCI and FKI will hold forums in Jeju Island. KCCI will hold the "45th KCCI Jeju Forum" from the 13th to the 15th at the Jeju Haevichi Hotel & Resort, followed by the FKI's "FKI CEO Jeju Summer Forum" from the 20th to the 23rd at Lotte Hotel Jeju. Both aim to invite representatives of member companies during the vacation season to discuss economic issues and foster camaraderie.

Regarding the recently prominent topic of "entrepreneurship" in the business community, both organizations express similar views. In May, KCCI declared a "New Entrepreneurship Spirit," signaling companies' commitment to addressing social issues such as climate change, social polarization, supply chain restructuring, and post-COVID-19 challenges.

The FKI has also long worked to promote entrepreneurship. In 1996, the FKI established the Corporate Ethics Charter, declaring, "Our companies must demonstrate creative and energetic entrepreneurship to innovate management and technology, establish a desirable political-economic culture that meets the new spirit of the times and public expectations through transparent corporate management, and grow into healthy and robust enterprises."

In October last year, the FKI held the "Korea Entrepreneurship Renaissance Forum" with the business academia to build consensus on the recovery and re-diffusion of entrepreneurship.

Moreover, both organizations issue similar commentaries on social and economic issues such as minimum wage decisions, Korea-US summit meetings, and the successful launch of the Nuri rocket. They also conduct largely similar projects in the ESG (Environmental, Social, Governance) field, including creating carbon-neutral value, supporting small and medium enterprises, and generating corporate social value.

An anonymous researcher from an economic research institute said, "Various economic organizations inevitably play similar roles in government economic policy formulation and resolving corporate difficulties," but added, "It is necessary to refer to overseas economic organizations like those in the U.S., which differentiate themselves through unique issues and research programs."

Chairman Choi Tae-won of the Korea Chamber of Commerce and Industry and Chairman Huh Chang-soo of the Federation of Korean Industries attended a luncheon meeting with President-elect Yoon Seok-yeol and the heads of six economic organizations at the Presidential Transition Committee in Tongui-dong, Jongno-gu, Seoul on the 21st. They are seen conversing before the meeting began. Photo by Yoon Dong-ju doso7@

'Breaking Free from the Shackles of 'Collusion Between Politics and Business' and 'Chaebol Spokesperson'

The FKI, originally established as the "Korean Economic Association" in 1961 under the leadership of Samsung Chairman Lee Byung-chul, was never free from political influence until the Park Geun-hye administration.

After the April 19 Revolution in 1960, the transitional government identified 24 business leaders from Samsung, Samho Group, Lucky Chemical, Hyundai Construction, and others as illicit wealth accumulators and conducted investigations, resulting in mass arrests of businessmen suspected of tax evasion.

When the Chun Doo-hwan administration took office, it released all these businessmen under the pretext of giving them a chance to contribute to industrial reconstruction. The businessmen then felt the need to form an organization to represent their interests, leading to the birth of the FKI.

Representing various sectors and industries in Korea, the FKI's members have led domestic economic and industrial growth. It has proposed the establishment of the Ulsan Industrial Complex, Export Industrial Complex, and General Trading Companies, among other initiatives, driving significant economic changes.

[Image source=Yonhap News]

However, since its inception as an organization representing chaebol interests, the FKI has not escaped the shackles of collusion between politics and business. It revealed deep-rooted problems such as fundraising for the Chun Doo-hwan Ilhae Foundation, illegal political funds for Roh Tae-woo's presidential campaign, illegal political donations to Lee Hoi-chang, and fundraising for the Mir Foundation and K-Sports Foundation.

As political demands and chaebol interests aligned, a dark history was created. Eventually, the four major groups?Samsung, Hyundai Motor, SK, and LG?all withdrew from the FKI, and the number of member companies decreased from around 600 to about 450. During the Moon Jae-in administration, the FKI was "passed over" in economic organization leaders' New Year meetings and overseas visits, with the KCCI taking over its role.

However, with the Yoon Seok-yeol administration, there are observations that the FKI is regaining its lost role. The economic organization leaders' meetings held through the FKI during the president-elect period have amplified its voice. There are also voices criticizing the repetition of past mistakes.

Social demands are increasing for economic organizations to break free from the label of being "spokespersons for chaebols." The reluctance of the four major groups to return to the FKI is partly due to this burden.

SK Chairman Chey Tae-won commented on joining the FKI, saying, "If conditions permit, it might be considered," but added, "Currently, none of the conditions are met, so there are no plans to join yet."

Professor Sung Tae-yoon of Yonsei University said, "Since each economic organization represents different voices of the business community, the FKI's participation in government activities is necessary," but added, "However, the FKI should make efforts to diversify its activities to encourage corporate participation in the future."

President-elect Yoon Suk-yeol (center) is taking a commemorative photo before a luncheon meeting with the heads of six economic organizations at the Presidential Transition Committee office in Tongui-dong, Jongno-gu, Seoul, on the 21st. From left: Spokesperson Kim Eun-hye, Kim Ki-moon, President of the Korea Federation of Micro Enterprise, Huh Chang-soo, Chairman of the Federation of Korean Industries, Choi Tae-won, Chairman of the Korea Chamber of Commerce and Industry, President-elect Yoon, Sohn Kyung-shik, Chairman of the Korea Employers Federation, Choi Jin-sik, Chairman of the Korea Association of Small and Medium Business, Koo Ja-yeol, Chairman of the Korea International Trade Association, and Chief Secretary Jang Je-won. Photo by Yoon Dong-ju doso7@

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