Business Circles Have High Expectations for New Government

In the Kim Dae-jung and Roh Moo-hyun administrations, people in power maintained an uneasy relationship with business circles. The so-called left governments have criticized business circles as a target of reform, creating frictions in their relationship with business circles for the past decade.

However, as Lee Myung-bak, the President-elect from the Grand National Party (GNP), has made clear his business and market friendly stance recently, a relationship improvement toward becoming mutually beneficial partners for growth is apparent between the government and businessmen.

In and out of business circles, people believe that the more entrepreneurship and corporate pride revive, the more investment sentiment will follow.

Lee said at a press conference on the day after the presidential election, “I will meet business leaders and explain them that how the new administration will improve investment environments.”

Lee sent a congratulatory letter to the Korea Trade Association for breaking the $700 billion-export mark and agreed to meet foreign business groups on January 15, 2008.

One businessman said, “The business world has been treated as a troublemaker during the Roh administration even though it greatly contributed to Korea’s economic development. Therefore, the corporate world has been a little passive and defensive in running its businesses. Under the next government, Korea’s corporate atmosphere will greatly change, including growing investment sentiment.

Signs of relationship improvements are being seen in the Federation of Korean Industries (FKI). The FKI said, “Lee’s campaign camp asked us to provide many ideas of economic policies, not a policy for new government, but a detailed plan and timing for implementation.”

Lee Seung-cheol, managing director of FKI, said, “We are the prioritizing policy recommendations we submitted to the upcoming government. Our attitude has changed from criticizing government policies to working together with a sense of responsibility.”

Kim Jong-seok, the president of the Korea Economic Institute, said, “The president-elect who knows the business world very well may make business circle feel hard with the new government. But, his background as a former successful businessman could make us talk about everything honestly. Business circles have high expectations of the new government.”

A better relationship is expected to affect the real economy positively.

Jeong Gu-hyeon, the President of Samsung Economic Research Institute (SERI), said, “It will take time for the new administration to put market-friendly policies into law. But when a policy direction is right, enterprise makes decision to invest based on forecasts. Therefore, a good policy direction will greatly contribute to revitalizing the economy. Even now, there is an analysis showing that halving regulations will result in a 4 percent increase in investment.”

However, some take a cautious approach in accepting optimism blindly. An employee from a conglomerate said, “Psychological factors matter in investment, but making money matters more.” He says that the psychological factor is not a silver bullet for the Korean economy, and that long-term and well-prepared plans, including securing a new growth engine, should be provided.

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