Companies have suffered a great deal from the 2020 pandemic. In recent years, the business environment is worsening due to the enforcement of legislation on corporate regulation by the political world. In the economic world, voices are growing, saying, “In the new year, we need to revive the economy by drastically removing regulations that impede entrepreneurship.” The photo shows downtown Seoul from Namsan on the 30th. Hankyung DB
A vice president in charge of planning and strategy from one of the top 10 domestic groups is holding a daily countermeasure meeting this month. This is because, as the amendments to the Commercial Act, Fair Trade Act, and Trade Union Act have passed the National Assembly plenary session at once, the management strategy will need to be rewritten next year. He said, “Because regulatory response is the top priority in the business, food preparation has been pushed back,” he said. “I am worried that it will fall behind foreign competitors and be cut off in the global market.”
70% of companies “The Korean business environment is bad”
The motivation of Korean entrepreneurs fell to the floor. Businessmen who have overcome the foreign exchange crisis and financial crisis are also complaining that it is difficult to withstand any more. They cited regulations and anti-business sentiment as the biggest problem.
This was also revealed in a survey conducted by the Korea Economic Daily on the 30th of Korea’s 50 largest groups. 63.5% of the groups (42) responding to the survey answered that Korea is a difficult environment for companies to do business in compared to major overseas countries. 7.3% said it was a very difficult environment. There was only one group that said the environment was better than overseas. When asked about the factors that deteriorate the business environment, 60.6% cited’increasing regulations and corporate-related legislation’. Many answered that it was due to the growing anti-business sentiment (18.2%) and the worsening external conditions (12.1%).
More than half (61.0%) of corporate-related bills handled at the end of the year judged it as “a variable that could have a significant impact on business plans or operational strategies.” Major groups said they were most concerned about the amendment to the Commercial Law (45.0%) among the bills that have passed or are under discussion. There is concern that outside directors may be elected led by foreign capital due to the separate election of audit committee members and restrictions on voting rights of major shareholders. The business community is pointing out that it may happen that executives from competitors can join the board of directors.
Many responded that they were worried about the Severe Accident Corporate Punishment Act (27.5%). The Severe Accident Corporate Punishment Act significantly raised the level of penalties for managers and companies, such as imprisonment for business owners for two or more years if a fatal accident occurs in the workplace. Experts are concerned that the law will not have a significant effect on preventing industrial accidents and will only produce side effects that shrink businessmen.
Business leaders such as Sohn Kyung-sik, chairman of the Korea Employers Federation, are also calling on the National Assembly to visit the National Assembly and do not forcefully promote the law. However, Kim Tae-nyeon, the leader of the Democratic Party and the Democratic Party, is pushing to complete the legislation before the extraordinary National Assembly session ends on the 8th of next month.
“To increase investment and employment next year, we need to remove regulations”
Entrepreneurs have appealed for the removal of unnecessary regulations and delaying the enforcement of legislation that makes business management difficult. As a result of inquiring about the impact of next year’s investment and employment expansion with 50’s group, the’repeal of unnecessary regulations’ was the highest with 7.8 points (out of 10 points). Major groups also determined that the adjustment of the enforcement timing of laws such as the Commercial Act and the Fair Trade Act and reconsideration of the legislation on the punishment of serious disaster companies (7.3 points) will have a positive impact on the economy next year. Companies analyzed that the government’s innovative growth (5.6 points) and the government’s economic stimulus measures (6.4 points) will not be of great help in expanding employment and investment.
Some businessmen stressed that the anti-business sentiment that prevailed in society should be resolved. A representative of a small and medium-sized business said, “President Moon Jae-in has never attended the New Year’s Meeting in the economy since taking office in 2017. In this atmosphere, it is nonsense to ask business people to give up strength.” Previous presidents encouraged businesspeople by attending the New Year’s Meeting held almost every year at the beginning of the year, but President Moon did not participate until this year. Representatives of other mid-sized companies said, “The cost such as labor costs increases rapidly, and the regulations restricting management activities increase as much as possible.” I don’t have any heart,” he said.
Reporter Do Byeong-wook [email protected]
Ⓒ Hankyung.com prohibits unauthorized reproduction and redistribution