[Economic Organization Shin Ji-hyung-do] Varied Launch Times and Sizes... Commonalities in Representing Member Companies and User Groups

Economic Six Organizations: What They Have in Common and What Differs
Sangui, Established First and Largest in Scale
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Behind-the-Scenes Power Struggles Continue

In March, Yoon Seok-yeol, then President-elect (center), is taking a commemorative photo with the heads of six economic organizations before a luncheon meeting at the Presidential Transition Committee office in Tongui-dong, Jongno-gu, Seoul. From left: spokesperson Kim Eun-hye, Kim Ki-moon, president of the Korea Federation of Micro Enterprise, Huh Chang-soo, chairman of the Federation of Korean Industries, Choi Tae-won, chairman of the Korea Chamber of Commerce and Industry, President-elect Yoon, Sohn Kyung-shik, chairman of the Korea Employers Federation, Choi Jin-sik, chairman of the Korea Association of Small and Medium Business, Koo Ja-yeol, chairman of the Korea International Trade Association, and Chief Secretary Jang Je-won. Photo by Yoon Dong-ju doso7@

[Asia Economy Reporter Choi Dae-yeol] Among economic organizations, the oldest is the Korea Chamber of Commerce and Industry (KCCI). Considering that the Hansung Chamber of Commerce, which KCCI regards as its predecessor, was established in 1884, this year marks its 138th anniversary. Although exact records from the Joseon era under King Gojong are not precisely preserved, it is said to have been formed mainly by market merchants around Jongno to respond to the increasing number of foreign traders and peddlers at the time.

It can be considered the origin of business gatherings that have continued to this day. After liberation, the Joseon Chamber of Commerce was established in 1946, and during the Korean War in 1952, the Chamber of Commerce Act was enacted, providing a legal basis for its establishment. The first chairman recognized by KCCI was Lee Jung-jae, president of Gyeongseong Electric, one of the three major power companies in South Korea at the time. There are 73 regional chambers of commerce and over 100 special members, with a total membership of about 180,000 companies. In other countries with extensive exchanges with Korea, such as the United States and Europe, chambers of commerce are also regarded as the primary private economic organizations.

Although KCCI leads in terms of establishment period and membership size, the Federation of Korean Industries (FKI) had a significant presence during Korea's postwar industrial development period. It traces its roots back to the Korea Economic Association founded in 1961. It claims to be a purely private organization voluntarily formed by companies. Starting with Lee Byung-chul, the founder of Samsung, as its first chairman, the federation has been led by chaebol heads such as Chung Ju-yung (13th to 17th chairman), Koo Ja-kyung (18th), Choi Jong-hyun (21st to 23rd), and Kim Woo-choong (24th to 25th).

The 2022 Economic Community New Year's Meeting was held on January 4th this year at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul. Attendees, including Prime Minister Kim Boo-kyum and Chairman Choi Tae-won of the Korea Chamber of Commerce and Industry, applauded as the event began. Photo by Kim Hyun-min kimhyun81@

Since the domestic industrial structure has been centered on large corporations, the FKI naturally played the role of the senior leader in the domestic business community for a long time. It served as a communication channel between companies and the government for policy proposals. However, it suffered a major blow during the Park Geun-hye administration due to its involvement in the state affairs scandal. As a result, the four major groups?Samsung, SK, Hyundai Motor, and LG?all withdrew. Membership, which once exceeded 600 companies, has reportedly shrunk to about 450.

The Korea International Trade Association (KITA) was established in 1946. Kim Do-yeon, Korea's first finance minister, served as its first chairman, and it was formed mainly by overseas-educated elites and those engaged in trade. Smuggling was rampant at the time, and the association was formed to correct this and establish systems and procedures reflecting the industry's interests. Currently, it has about 70,000 member companies.

The Korea Employers Federation (KEF) was established in 1970, separating from the FKI. Its initial name was the Korea Employers Council, and it adopted its current name in 1981. It is an organization that deals with labor-management issues, representing the interests of employers, i.e., the management side. It plays the role of employer representative in processes such as minimum wage determination and the tripartite labor-management-government council. The first chairman was Kim Yong-ju, founder of Jeonnam Textile and father of former lawmaker Kim Moo-sung.

Huh Chang-soo, Chairman of the Federation of Korean Industries, is announcing the "Urgent Proposal from the Business Community" in response to the spread of COVID-19 at the Federation of Korean Industries building in Yeouido, Seoul, in March 2020. Photo by Yoon Dong-joo doso7@

During the previous administration, as unfavorable systems and laws for the business community were repeatedly enacted, criticism arose that economic organizations were not fulfilling their roles. This led to discussions about merging KEF and FKI. A case was cited where two similar economic organizations in Japan merged into one in the early 2000s.

The Korea Federation of Small and Medium Business (Kbiz) was established in 1962 under the Small and Medium Enterprise Cooperative Act. It has about 600 cooperatives and associations as members, with approximately 660,000 individual members. Considering that there are about 3.5 million small and medium enterprises in Korea, the organization rate is less than one-fifth, but it represents the entire SME sector in Korea. The first chairman was Lee Gu-jong, a civilian who led the establishment of the organization.

In March, Yoon Seok-yeol, then President-elect, attended a luncheon meeting with the heads of six economic organizations at the Presidential Transition Committee in Tongui-dong, Jongno-gu, Seoul, and delivered a greeting./Photo by Yoon Dong-ju doso7@

The Korea Federation of Medium-sized Enterprises (KFME) traces its roots to the Korea Economic Association founded in 1992. It is the most recently established among the six major economic organizations. A special law was enacted in 2013, and it was elevated to a statutory organization the following year. It has about 740 member companies, and its first chairman was Yoo Ki-jung, who was involved in publishing and served as a member of the National Assembly. Yoo also served as chairman of Kbiz in the 1980s. Although at one point the Korea Federation of Banks was considered one of the six major economic organizations, it is limited to a specific industry or sector, so KFME is generally recognized as the sixth major organization.

All six organizations fundamentally work for the benefit of their member companies and share the common characteristic of being employer organizations. They voice opinions or represent interests that individual companies find difficult to express, or provide evidence such as surveys and statistical data during the process of establishing systems and policies. Since their main role is government relations, there is intense competition over who holds the 'priority' in negotiations with the government. This is why they compete to be the first to host events inviting the president or to lead economic delegations on overseas trips.