Gov't and business try to mend ties

Will the relationship between the government and business circles, which maintained strained ties during the last several months, improve?

The new economic team, led by Minister of Finance and Economy Jin Nyum, is to have the first luncheon meeting with the heads of the five leading economic organizations, including the Federation of Korean Industries Chairman Kim Gak-Choong, on Augost 21 at the Banker`s Club in Myongdong, Seoul.

In the day`s meeting, the government will be represented by Minister Jin, Minister of Commerce, Industry and Energy, head of Fair Trade Commission and the head of Financial Supervisory Commission, while the business circles will be represented by the head of the Korea Management Association, chairman of the Korea Chamber of Commerce and Industry, chairman of the Korea International Trade Association, and head of Small and Medium Industrial Promotion Cooperation.

The meeting is more than just a formal first-time meeting. Both sides show strong intention to hold an open-minded dialog. In particular, Minister Jin, as head of the economic team, has a belief that unnecessary intervention in corporations would have a negative impact on the national economy.

So far, the talks between government and business have been characterized as being the government squeezing corporations for massive restructuring and chaebol reform. For this reason, corporations have complained about the meeting.

However, the day`s meeting is expected to be a harmonious gathering. It is likely that both sides will study ways to help each other for national economic development by removing distrust and misunderstanding among them.

Jin reportedly plans to steer government policy so that it will support corporate activities. In particular, he is expected to express that he would accept the proposal by the business circle regarding restrictions and reform and reflect them in government policy. It was learned that Jin would propose a working-level channel for dialog between the government and industries, which might deal with detailed topics that ministers and heads of industrial associations hardly can touch. Officials of the Ministry of Finance and Economy said that the working-level meeting will be organized by the assistant minister and first-grade officials of each economic ministry and that they will begin dialog once the business circle designates working-level officials. They are expected to exchange proposals and policies.

Jin also is planning to call for more aggressive restructuring and reform in awareness and business practices while stressing an improvement in ruling structure for healthy corporate development.

The heads of the five economic organizations are expected to transfer the difficulties faced by themselves, as well as some policy proposals.

Particularly, they will ask that the second round of ruling structure improvement not lead to weakening corporate activities and that measures to stabilize the capital market be taken.

For more active South-North economic cooperation, the corporations would demand various systematic dividends, such as agreements on avoidance of double taxation and investment guarantees at the earliest possible moment.

Despite the will of government and business to achieve active dialog, it will have to be watched further to see if the day`s gathering will lead to thawing, as there still exist differences in the viewpoints regarding questions like chaebol reform.