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Companies Feeling Donation Pressure

Posted March. 22, 2006 03:12,   


Some conglomerate executives are paying close attention to the economic polarization issues that are constantly being brought up by the government and the ruling party.

They are feeling pressure from high-ranking government officials and politicians who concentrate on these issues.

In addition, President Roh Moo-hyun is also planning to give a lecture on “corporate social responsibility during times of economic inequality” to CEOs of major conglomerates.

Many executives say off the record that it is a pity that companies are not left to carry out their fundamental tasks: making profits, hiring employees, and making investments.

According to a Dong-A Ilbo research study, major companies may have adopted a special social contribution program to meet the government and ruling party’s demands.

Hyundai-Kia Motors and SK Corporation are planning to unveil their social contribution programs soon. The Samsung Group has already announced a social contribution plan.

Hyundai-Kia Motors is planning to announce a social contribution program in early April in which all its employees donate a certain amount from their salary to the low income earners.

SK Group is working on “creative” contribution methods. Workers are looking over many plans to determine their feasibility.

LG, Hanjin Group, GS, and Kumho Asiana Group are also taking measures to create corporate social responsibility plans

Many business insiders say that it was not just coincidence that Samsung Group announced its 800 billion won donation plans right after the government and the ruling party raised the issue of economic polarization.

One economic organization official said that it would be impossible to turn one’s back on these issues when the president visits New Year celebration meetings held by the business circle and demands corporations’ attention on economic inequality. He said that the government is not directly demanding a solution to the inequality problem, but that there is no doubt company executives are feeling the heat.

One corporation executive questions the administration’s purpose by asking why government is using companies to offer “economic inequality issue-related treats” that are seemingly designed to get support from the most populous stratum.

Economics professor Hong Gi-taek at Chung-Ang University says that when the administration indirectly urges corporations to donate to society, it is urging them to pay a quasi-tax. He comments that a more effective solution to the economic inequality issue is to give corporations a better business environment, which would lead to more investment, employment, and taxes.

Jeong-Hun Park sunshade@donga.com