South Korea’s newly elected president Moon Jae-in is planning to reform the country’s economy and make an end to the cozy ties between the government and big family-run conglomerates, known as ‘chaebol’.
The economy of South Korea is driven by a number of ‘chaebol’, which are big family-run conglomerates. The best known ‘chaebol’ are Samsung, Hyundai and LG. According to the Korea Fair Trade Commission, the combined sales of the 31 largest conglomerates accounted for 84% of the country’s GDP in 2016.
Historically, ‘chaebol’ have been closely connected to the South Korean government and they have often received preferential treatment. Moon Jae-in, a former human rights lawyer, was elected as president after former president Park was impeached in the midst of a corruption and bribery case involving Samsung.
Moon Jae-in announced his plans to limit the influence of the founding families of the conglomerates and implement more stringent penalties for cases such as bribery, embezzlement and breach of trust. With these measures, the president hopes to promote small and medium sized companies and make an end to the ‘emperor’ style of leadership of the conglomerates.
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