Fate of chaebol reform

Sustainable growth not possible without fair competition

The Moon Jae-in administration has come under criticism for making little progress in reforming family-controlled conglomerates, or chaebol. Some critics have even accused President Moon of reneging on his campaign commitment to chaebol reform.

The three pillars of Moon's economic policy are income-led growth, innovative growth and economic fairness. Chaebol reform is a core part of creating a fair economic system. It is almost impossible to buttress the pillars without carrying out this reform. That's why chaebol reform is important in realizing fair competition and sustainable growth.

What the Moon government should do is reduce the concentration of economic power on a small number of big businesses. Without doing so the country cannot address the worsening problem of social polarization between the haves and have-nots as well as the economic imbalance between large conglomerates and small and medium enterprises.

Disappointingly, however, the liberal government has yet to produce any tangible results. Moon's income-led growth policy has gone nowhere ― not creating more jobs and not bringing a higher income to the working class. Innovative growth still has a long way to go, while it appears to be impossible to usher in a fair economy.

Concerns are growing that the Moon administration might backpedal on chaebol reform amid the deteriorating economic conditions. This is all the more so after the President met Samsung Electronics Vice Chairman Lee Jae-yong, April 30, at the firm's ceremony to declare a new vision for system semiconductor manufacturing.

The meeting prompted speculation that the government was returning to the outdated way of nurturing conglomerates to boost exports. Even some progressive scholars slammed Moon for neglecting chaebol reform, although Fair Trade Commission Chairman Kim Sang-jo dismissed such criticism.

The Moon administration should make unwavering efforts to push to reform conglomerates to get rid of their unfair business practices and create a level playing field. Chaebol reform is not a matter of choice, but a matter of survival for the Korean economy.