By Ju-min Park
A Park will be back in South Korea's presidential mansion come February, and the
big businesses, or chaebol, that dominate the country's economy will be breathing a sigh of relief
that her left-wing challenger did not win Wednesday's presidential
Victory for Park Geun-hye, the 60-year old daughter of South Korea's former
military ruler, in the election means the top chaebol - five of
whom control assets worth 57 percent of gross domestic product in the world's
14th largest economy - can get back to the business of making money.
Park's left-wing challenger had threatened to end the complex web of
shareholdings that enable families to control sprawling conglomerates like
Samsung Group and Hyundai Motor Co..
The election came at a sensitive time for
Samsung and Hyundai as both are in the process of passing power to a third
generation of their family owners, a process that left-wing candidate Moon
Jae-in could have complicated with an attack on their shareholdings, had he
"She doesn't have any plans to alter the structures of the chaebol ownership
and their concentration of economic power," said Kim Sang-jo, an economist at
Hansung University and executive director of a group urging reform of South
Seoul shares rallied on Thursday after Park's win adding 0.32 percentage
points, in part on relief that Moon lost.
"The election results have eased policy uncertainty, and raised hopes of
economic stimulus," said Cho Young-hyun, an analyst at Hana Daetoo
CHAEBOL AND PARK
Park's father, Park Chung-hee, is the person responsible for building the
chaebol during the 1960s and 1970s.
With a mix of threats and inducements for the top chaebol bosses, the
founders of Samsung and Hyundai emerged from the ruins of the 1950-53 Korean War
to help build a modern industrial state that has been dubbed "The Miracle on the
At one stage, Park the father threatened to imprison Lee Byung-chull, the
founder of Samsung.
At another, in early 1970s, Park yelled at Hyundai founder Chung Ju-yung
telling him he was incapable of building a shipyard and would cut all ties with
Hyundai, according to Chung's memoirs.
"Chairman Chung, we must do this!" Park, after a long silence and a
cigarette, said of the plan to build a shipyard, according to the
Chung said "Yes Sir" and the shipyard was built and became the world's
largest shipbuilder, Hyundai Heavy Industries Co Ltd. .
Park Geun-hye is not likely to be as irascible as her father and her policies
She has promised to share wealth more widely but said no new taxes on individuals or companies, and no
attack on the chaebol.
"It is not my aim to dismantle or bash the chaebol," Park said in
"The main aim is to fix negative parts such as abuse of economic power and to
save the positive part the chaebol have such as job creation."
Yet, Park can't be too aggressive when high-income conservative earners make
up a large part of her support and her party isn't willing to abandon its
pro-business stances, analysts said.
Tax revenues in South
Korea are just 19.3 percent of gross domestic product (GDP), according to
investment bank Nomura, compared with more than 30 percent of GDP in most
advanced economies, effectively limiting Park's room to increase spending if she
keeps her pledge not to raise taxes.
Park, who came into politics at the time of the 1997-98 Asian financial
crisis to "save" her country, also looks unlikely to tinker with South Korea's
export-driven model. If anything, she looks set to be risk-averse.
"We believe that, in light of the painful memory of the 1997 currency crisis,
the top priority of policymakers, regardless of political ideology, is to reduce
Korea's external vulnerability," Nomura said in a report issued on election
The chaebol themselves appeared to be happy with Wednesday's outcome and the
prospect of being left alone.
"We want (the president-elect) to undertake lots of economic policies that
help investments and job creation so that our companies can focus on reviving
the economy," chaebol lobby group the Federation of Korean Industries said in a