[Editorial] Business Health

At Cheong Wa Dae on Wednesday, President Roh Moo Hyun met with the leaders of the country`s major conglomerates and SMEs to discuss ways for mutual cooperation. President Roh said at the meeting that companies shall have the autonomy in pursuing mutual cooperation and that the government is not trying to force or threaten conglomerates in any way, in response to the criticism that the government is forcing mutual cooperation upon conglomerates.

However, conglomerates do not seem to have much autonomy given that 20 heads of conglomerates and business organizations were called to Cheong Wa Dae to be lectured on the need to cooperate with SMEs, after which they pledged to seek mutual prosperity with SMEs.

It is true that businesses are living in an “age of mutual prosperity.” Without pursuing co-growth with suppliers and contractors, conglomerates cannot develop. This is why conglomerates and business organizations themselves are seeking mutual prosperity and devising social service or contribution measures.

Nevertheless, was there a need for Cheong Wa Dae to hold such a meeting with business leaders? The Federation of Korean Industries announced that day that 30 major conglomerates will invest 1.36 trillion won in SMEs for mutual cooperation. Will the public give credit to Cheong Wa Dae and the Ministry of Commerce, Industry and Energy for this outcome? Instead, more people will probably be reminded of the old days under authoritarianism.

The government is being inconsistent in that while proclaiming “autonomy,” it has expanded subjects of mutual cooperation from 10 major conglomerates to 30 major conglomerates, and it has prescribed those companies to cooperate with both primary and secondary suppliers. “The government-led mutual cooperation measures in fact demand conglomerates to do charity work for SMEs, and the government is handing over its own social responsibility to businesses,” Kwon Hyuk-cheol, Director of Law & Economy Division at Center for Free Enterprise, criticized.

It is also hard to understand the need to establish a “Mutual Cooperation Committee” at the Office of the Prime Minister where an overflowing number of committees already exist. Why is the government trying to do what the private sector is doing well and make companies report to a government committee? The government came up with several ideas, such as opening conglomerate childcare facilities to nearby SME employees to tackle the low fertility rate problem.

Regardless of the soundness of the idea, the burden of implementing it will fall on companies in the end. The government is once again trying to saddle its responsibility upon others and take credit for what it did not do.