Riding herd over South Korea's SK Group, a sprawling energy and petrochemical giant with annual sales of 53 trillion won (US$44.5 billion) in 2001, is Son Kil-seung, a silvery-haired chief executive officer and its group chairman.
If running the SK, the country's third largest chaebol or family-based conglomerate, wasn't already a tough job, the 62-year-old professional manager is heading into even riskier zone of uncertainty now as he takes over the chairmanship of Korean Federation of Industries (FKI) beginning Feb. 5.
FKI, a Korean equivalent of Japan's powerful Keidanren organization of big-business club, will not only bring more responsibility; it puts him on a collision course with the incoming administration of president-elect Roh Moo-hyun.
It's a job he has never sought. A professional manager rather than chaebol-owner, he has taken the FKI chairmanship only after no chaebol owners agreed to hold the post, for fear of running diametrically against the new government determined to put South Korea's big business groups through a new round of corporate restructuring. Thus Son is only the third professional manager to hold the FKI chairmanship in its five-decade history.
The coming round of government-business confrontation is expected to be sharp and stormy. Roh vows to push through a new legislation to plug the loopholes in the inheritance and gift taxes so that second-generation chaebol owners will not inherit assets without paying due taxes.
His team of experts are demanding more transparency in the corporate sector that will make it difficult for the big business community to move assets without scrutiny by government officials.
In the equity market, the next administration hopes to institute the system of class-action lawsuits to bring more transparency and protection to bear over the bourse by allowing small investors to sue big listed companies for fraudulent accounting, insider-trading and false public disclosures.
On the bigger issue of chaebol control, the government's Fair Trade Commission will seek a continuous ban on cross-investment by one chaebol unit to another unit. Also, chaebol groups' financial subsidiaries will not be allowed to freely move funds to other units.
Thus a battle line is being drawn with FKI publicly opposing these steps as being anti-business in nature. While the chaebols line up against the government, the various civic organizations calling for reform are standing behind the Roh administration. The coming battle will therefore redraw the country's chaebol lineup and reshape the institutions governing Korea Inc.
Corporate restructuring and economic reform in general have been at the heart of South Korea's national agenda since the Asian financial crisis of 1998, which helped bring former president Kim Dae-jung to office.
Although he pledged to fundamentally overhaul the chaebol-dominated economic structure, Kim's reform weakened halfway under the various compromise. That has left other issues such as labor market flexibility, privatization of state-run enterprises and the corporate governance system largely left intact. Especially lagging has been the corporate governance system, which has perpetuated the private sector's imperial management style.
These are all part and parcel of the reform package necessitated by the country's distorted economic structure after four decades of industrialization under the military-backed authoritarian government.
The aim now is to loosen up the system of control, break up oligarchy and broaden the base of economy in the manner of Taiwan's -- favoring more diver-sity, better distribution and improved competitiveness.
Some progress has been achieved. Hit by the Asian financial contagion, thousands of business companies, dozens of financial firms including banks broke up and collapsed. Kim allowed the nation's second-biggest chaebol, Daewoo Group, to fall and disintegrate under an astronomical sum of US$80 billion in debts owed to a variety of domestic and foreign lenders.
In the course of divesting their holdings and shedding weight without government support, chaebol groups have steadily recovered a measure of competitiveness. But the trouble is that Kim's reforms stalled there, failing to move forward to other key areas such as labor market flexibility. As a result, South Korea's trade unions remain as militant as ever.
Roh is moving into the presidential Blue House pledging to continue where Kim left off. He is seeking to do this by implementing the campaign promise to make South Korea a new financial and technological hub in Asia over the next seven years.
He has promised to create at least half a million jobs in the next five years, to fuel an ambitious growth rate of up to 7 percent in the final year of his five years in office.
The road ahead is replete with challenges, though. Many of his reform bills, including the inheritance tax law bill, must pass through the National Assembly dominated by the conservative opposition Grand National Party that is ambivalent about these initiatives. The debate will echo the familiar themes that clobbered Roh during the heated election campaign, such as that he is making use of militant unions to domesticate chaebols.
Roh would be courting disaster by pushing for a hasty action. On one hand, he needs to ensure domestic and foreign businesspeople that he will stand firm against labor agitation to provide a stable investment environment. To do this, he must show a strong hand in curbing the excesses of militant trade unions clamoring for a shorter work-week and more benefits. A confrontation is shaping up here as well as thousands of union members at Doosan Heavy Industries hold demonstrations calling for reinstatement of workers fired for violent actions.
Another challenge comes from the worsening security environment on the peninsula as North Korea continues its adventurous course of developing weapons of mass destruction. The North's nuclear challenge stands in the way of attracting foreign investment and focusing on economic reform agenda.
The nuclear issue is likely to overshadow Roh's presidency in the next few years as the US acquires time to refocus on Korea following its war with Iraq.
All this makes it critical for the next administration to develop consensus at home as it pursues reform agenda, especially in parliament.
The first order of business for Roh is to involve the conservative opposition in implementing key reforms so that no significant legislative groups are alienated in the unfolding political process.
Kim squandered his precious time and resources in the year of office dealing with the opposition in parliament triggered by his aloof and arrogant leadership style.
In this regard, Kim's "imperial" manner will provide an excellent lesson for Roh to chew in the administration.
Shim Jae Hoon is a Seoul-based journalist and commentator.
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