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| Korea Chamber of Commerce and Industry Chairman Park Yong-maan |
South Korea shouldn't hold high hopes for looming inter-Korean economic cooperation because China and Japan will be just as aggressive in securing business deals with North Korea, according to the head of the country's largest business association.
Park Yong-maan, chairman of the Korea Chamber of Commerce and Industry (KCCI), told reporters Thursday that when the North opens its doors to the outside world, South Korea will be just one of many nations seeking to make inroads into the reclusive regime.
"I have said all along that South Korean companies will not get any special treatment from the North," Park, who is also the chairman of Doosan Infracore, said. "As far as I know, North Korea has never said it will deal only with its southern neighbor when it opens its doors. We will be just one of many business partners because the North will certainly try to attract investments from China, Japan and other countries to get the best terms."
He also cautioned against hasty optimism toward inter-Korean economic cooperation, stressing it will take at least two years until international sanctions and other restrictions on the reclusive state are lifted.
"When the heads of the two Koreas met on April 27, I warned against growing optimism toward cooperation with North Korea, saying it would take two years minimum until the North returns to the international community," Park said. "So we shouldn't lose our senses and make irrational decisions all the time when dealing with the North."
Minimum wage hike devastates self-employed, small firms
The chairman expressed dissatisfaction with the government's recent decision to hike the minimum wage by 10.9 percent to 8,350 won ($7.40) an hour next year, saying an increasing number of small businesses are being forced to close because of soaring labor costs. This year, the wage jumped 16.4 percent to 7,530 won from 2017.
"Large companies are not affected by the minimum wage hike because their workers already get paid more than that," Park said. "The problem is mom-and-pop shops and other self-employed and small companies. They are left with no choice but to reduce the number of employees, most of whom are receiving the minimum wage, due to the surging labor costs." he said.
"In order to narrow the income-widening gap between rich and poor, and bolster domestic consumption, the government should introduce a wide range of economy-boosting policy measures. It needs to expand the earned income tax credit and other financial support programs for low-income households."
Deregulations
The KCCI chairman called on the Moon Jae-in administration and political parties to do everything they can to make Korea more business-friendly.
"I have been calling for deregulation for the past five years but unfortunately nothing has changed much," Park said. "If the government wants to achieve its No. 1 policy goal of creating jobs, it must ease regulations so that companies invest more and hire more workers."
The government has already generated many positions in the public sector over the past year but this has failed to improve job market conditions, particularly for young people, he said.
"It is a must for policymakers to abolish entry barriers in many service industries and scrap other regulations to create the environment in which more businesses choose to invest and create jobs. This will also encourage more people to begin startups," the chairman said.
He then urged the Moon administration to play only a watchdog role and minimize its involvement in the market.
"The government shouldn't focus on making rules to restrict corporate activities," Park said. "It needs to let companies do what they want to and limit its role to monitoring possible market failures and taking appropriate steps. These days, many ministers are holding meetings with businesspeople. But what we want is not a photo op, but their commitments and actions for creating a more business-friendly environment."
