(Unofficial translation)

I am glad to meet you all. We are gathered here today to discuss a very important topic.

A fair economy is about achieving economic democratization. Every one of us wants to become well off. Everyone wants returns that match the hard work that they put in. As such, a fair economy is about genuinely fulfilling natural desires.  

In the past, the Korean people were fixated on working day and night; the goal being “Let’s try to live well off too.” In just half a century, Korea has become an economic powerhouse near the ranks of the world’s top ten economies.

In the process of economic growth, however, we lost sight of fairness. Results reaped together were funneled to a group of conglomerates. Small and medium-sized enterprises were not able to share in the growth. Foul play and unfair privileges as well as irregularities and corruption undermined the household economy of low-income families. The more growth we achieved, the worse wealth inequality became. As for businesses, they weakened their international competitiveness. 

A fair economy would guarantee fair competition throughout the economic process and duly distribute the fruits of growth as a result. Economic democratization through a fair economy aims at having low-income people, corner-shop retailers, SMEs, and conglomerates prosper together.

Only when people live well can businesses sustain growth. Only when fair competition is guaranteed and hard work pays off will the drive to innovate increase. Even if one fails, he or she can rise up again to take on challenges. Businesses can enhance their international competiveness through the promotion of transparency and fair competition. Only when a fair economy enables autonomous and creative economic activities will businesses be able to secure new growth engines.

We should now prosper together. A fair economy will serve as the foundation for that cause. 

The Government has worked to improve institutions and practices to create a fair economic environment. More than anything else, it has focused its capabilities into remedying the uneven balance of power between contract providers and vendors. A punitive damages system has been put in place to provide restitution of up to triple the damages caused by distribution companies’ unfair business practices. It has also become possible for subcontractors to demand payment adjustments if manufacturing costs increase due to hikes in the cost of labor and materials. 

In cases involving complaints brought against technology theft, the accused will be immediately barred from participating in public bids. The investigation authority for technology theft has been strengthened by extending the statute of limitations from three years to seven years.

Efforts have been made to improve the ownership and corporate governance of conglomerates in a bid to protect low-income people’s right to life, including mom-and-pop store owners. Those large businesses found to be bent on awarding lucrative contracts to their own subsidiaries and doing unfair internal transactions have been subjected to stringent law enforcement against their illegal profit-taking practices. In addition, approximately 90 percent of the cross-shareholding webs among affiliates that have monopolized their governance have been loosened. 

At the same time, support has been provided to boost cooperation between conglomerates and SMEs for their mutual benefit. The number of mutually-supportive smart factories, in which large businesses support SMEs with funds and personnel, has increased. Public organizations’ so-called “win-win payment system” has been expanded to cover second- and third-tier suppliers. 

Commercial leaseholders will be able to request contract extensions of up to 10 years instead of five years, and a measure to ensure the receipt of goodwill premiums due to them from new leaseholders has taken effect. These are significant achievements to safeguard the rights of leaseholders.    

There is still a long way to go until a fair economy is institutionalized and economic democracy takes root, but the Government is making its utmost efforts to create a new economic order. 

What is important is that these efforts can only bear fruit when the people and businesses play leading roles. The Government will create an environment in which the people can actively exercise their economic rights. Through autonomous economic activities, economic players should come to recognize a fair economy as the natural economic order and establish it as our culture and norm.  

The first step is changing the perception that mutually beneficial cooperation between large companies and small and medium-sized enterprises are favors granted by large companies. Cooperation for mutual benefits is a path for large companies to sharpen their competitive edge and for SMEs and large companies to grow together by enhancing innovation among subcontractors. 

There have been positive changes recently as a result of pursuing a fair economy. There is an increase in cash payments by large companies in subcontract transactions, and there is a decline in the number of cases where large companies demand unreasonable discounts from their subcontractors. Improvements have also been made in making business practices fairer between franchisers and franchisees as well as large retailers and their suppliers. There are even cases of unions chipping in some of their wages to aid subcontractors.

I hope that efforts will be made so that these changes can take root within corporate culture voluntarily and not from fear of legal sanctions. I ask related institutions to strive further to improve the negotiating power of economic underdogs.       

There are 13 fair economy-related amendments to such laws as the Fair Trade Act and the Commercial Act pending before the National Assembly’s regular session. 

All of the following are very important: protecting the interest of shareholders and creating a system to oversee management (the Commercial Act); helping franchisees and dealerships organize an association and strengthen their bargaining power (the Franchise Business Act and Agency Business Act); systematically requiring large companies to share profits with SMEs based on agreed terms and limiting entries by large and middle-market companies into certain types of businesses to protect microbusinesses (the Act on the Promotion of Collaboration between Large and Small-Medium Enterprises), and protecting the rights of consumers. 

At Monday’s inaugural meeting of the standing state affairs consultative body, the participating representatives from the ruling and opposition parties and the Government agreed to make concerted efforts to amend fair economy-related laws such as the Commercial Act. I ask the National Assembly and the Administration to gather strength so that these bills can be passed as proposed at the regular session of the Assembly without fail. 

Our economy should now move “together” and “further in a sustainable manner” instead of “fast.”  

Economic democracy can be achieved by the voluntary participation of all. Let us make endeavors together so that a fair economy becomes the root of our economy. The Government will encourage and support economic stakeholders to help them advance. 

Thank you.