Hankyung Association, to Become the Leading Business Group... "Consistently Communicate Policies and Inform the Public"

Ending Collusion Between Politics and Business Is as Important as Performance
Current Issues in International Trade, Taxation, and Labor
"Meet Frequently with Political Circles and Government but Disclose Transparently"

The Federation of Korean Industries (FKI) has renamed itself the Korea Economic Association (KEA), aiming to transform into a "global think tank-style economic organization," but it still has a long way to go before properly fulfilling its role as the leading figure in the business community. Eradicating collusion between politics and business from an ethical standpoint is fundamental, and it must be recognized as a key player working with the political sphere and government to resolve pressing issues such as trade, taxation, and labor. Additionally, institutional mechanisms must be established to transparently disclose decision-making processes to the public.

On the 22nd, the FKI held an extraordinary general meeting, approving the organizational restructuring plan to change its name to KEA and absorb the Korea Economic Research Institute under its umbrella. Ryu Jin, chairman of Poongsan and known for his expertise in U.S. affairs, was appointed as the 39th head. The full-time vice chairman will be announced next month. Although the appointment of former acting chairman Kim Byung-joon as an advisor was not on the agenda, Chairman Ryu stated, "We plan to have Kim as an advisor and seek his counsel when necessary." Detailed rules regarding the selection of members for the Ethics Management Committee, which reviews the appropriateness of government-related fund contributions and external projects requiring funding, will be established later. However, the failure to disclose measures to ensure the committee's decision-making independence, block external pressure, and enforce binding penalties in case of undue influence was noted as a limitation.

Demonstrating capability beyond ethics is also a challenge. The business community demands that KEA be recognized not only for providing high-quality analytical materials but also as a practical contributor to solving complex issues such as trade, taxation, and labor. While creating and benchmarking a role model like the U.S. Center for Strategic and International Studies (CSIS) is a good strategy, there are calls to reflect on the FKI’s heyday. They want to see the FKI of the Roh Moo-hyun administration era, when it led discussions on major agendas with not only the president but also opposition parties.

Ryu Jin, the 39th chairman of the Federation of Korean Industries, speaking at the extraordinary general meeting on the 22nd.
[Photo by Federation of Korean Industries]

At its peak, the FKI led policy initiatives such as the 1998 roundtable on corporate restructuring of the four major conglomerates, the 2004 national report meeting on investment strategies for job creation attended by President Roh Moo-hyun, the launch of the Regulatory Reform Promotion Group in 2007, the establishment of the 3 million job creation committee in 2010, and participated in the Korea-U.S. FTA negotiations and ratification process from 2006 to 2012. Politically, it led the 2010 presidential invitation roundtable with the top 30 conglomerates and the 2015 policy roundtable with the opposition party (New Politics Alliance for Democracy). Its practical achievements include supporting the 1988 Seoul Olympics bid, contributing to the development of LG Display in Paju, Gyeonggi Province, Samsung Display in Tangjeong District, Asan, Chungcheongnam-do, and the Samsung Semiconductor Industrial Complex in Hwaseong, Gyeonggi Province. However, since the Park Geun-hye administration, the FKI has deteriorated into an "opaque, powerless, and slow organization." Even before the 2016 political scandal, it was criticized for its closed organizational operation, disappearance of meetings with the president and lawmakers, and lack of regulatory and policy response capabilities. The decline was not due to being unfairly implicated in the scandal but rather a gradual loss of competence beforehand.

Experts advise that the organization should operate by identifying core agendas that resonate with the entire economic sector and transparently disclose major resolutions to the public. Chairman Ryu plans to strive for achievements in his specialty, the trade sector. At the extraordinary general meeting the day before, he said, "South Korea, which has proudly joined the ranks of the Group of Seven (G7), should make this our goal." Current issues include the U.S. CHIPS and Science Act, the Inflation Reduction Act (IRA), and the European Critical Raw Materials Act (CRMA). When conducting working-level negotiations with the U.S. and the European Union (EU), KEA must serve as a bridge between the government and businesses.

In the mid to long term, it is advised that KEA should go beyond being satisfied with participating in Blue House and political events ahead of other organizations and instead take the lead in inviting the president and politicians. The example of Japan’s Keidanren, which frequently meets with Prime Minister Kishida Fumio, is worth referencing. Choi Joon-sun, honorary professor at Sungkyunkwan University School of Law, said, "Since KEA has many internal control mechanisms such as the Ethics Committee and advisory bodies for member companies (like Samsung’s Compliance Committee), the likelihood of KEA being fingered as the root of collusion between politics and business is low. The problem lies in 'dark' communication with the political sphere, as seen in the political scandal, but frequent meetings are a desirable phenomenon." He emphasized, "It is important to avoid forced attendance at political or government events, secretive collusion without media involvement, and other such practices."

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