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South Korean business groups say will work with new president on job creation
May 10, 2017 / 5:00 AM / 6 months ago

South Korean business groups say will work with new president on job creation

SEOUL (Reuters) - Business groups representing South Korea’s largest companies said on Wednesday they will work with new President Moon Jae-in in creating jobs and boosting investment, and fix their “past wrongdoings.”

South Korea President Moon Jae-in and his wife Kim Jung-sook wave to neighborhood residents as they arrive at the presidential Blue House in Seoul, South Korea May 10, 2017. REUTERS/Kim Kyung-Hoon

Moon started his five-year term on Wednesday, replacing his predecessor Park Geun-hye who was impeached over a corruption scandal that exposed cosy ties between the government and businesses, including South Korea’s largest conglomerate Samsung Group.

In his first speech as President, Moon said he will “take the lead” in reforming South Korea’s powerful family-run conglomerates, called chaebol and end the nexus of politics and business that was at the centre of the bribery scandal. He also said job creation will be his top priority.

“We will do all we can do to unify the public, overcome the pending economic crisis and create jobs in line with the launch of the new administration,” the Korea Employers Federation said in a statement.

The business lobby group, which represents Samsung, Hyundai Motor Group and other conglomerates, also called for the government to create a business-friendly environment by eliminating regulations and nurturing new growth areas.

The Federation of Korean Industries (FKI), once the country’s most powerful business lobby group which was under fire for its alleged role in the scandal, said it will “fix its past wrongdoings, and we will do our best to focus on investment and job creation for the future of our economy.”

Prosecutors have charged Park and her friend Choi Soon-sil with colluding to pressure Samsung and other conglomerates to donate to two non-profit foundations set up to back Park’s policy initiatives. The FKI helped set up the foundations. Samsung, Hyundai and some big businesses quit the FKI in the wake of the scandal.

“It’s still early in the administration. We have plans already in place concerning jobs and other matters which we will follow. If in the future the government gives some guidance, we will consider our response,” said an official in one of South Korea’s top conglomerates. The official asked not to be identified due to the sensitivity of the issue.

Despite Moon’s promises to reform chaebols, drastic changes are not expected in the near term in a divided parliament where Moon’s ruling Democratic Party does not have majority. An aide to Moon told Reuters that the president will put job creation ahead of his other agenda, such as corporate reform.

Moon pledged to boost employment especially in the public service sector, saying that the growth of big chaebols, which dominate Asia’s fourth-biggest economy, have not translated into job growth.

“It will be difficult to create jobs without cooperation with business circles. But Moon is unlikely to drive the job creation of the private sector like his conservative predecessors did, as such efforts failed,” said Park Ju-gun, the head of corporate analysis firm CEO Score.

Reporting by Hyunjoo Jin, Additional reporting by Joyce Lee; Editing by Soyoung Kim and Muralikumar Anantharaman

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