[Yeouido Interview] Kim Byung-wook: "I Will Build a Democratic Party That Talks About Growth Alongside Fairness"

Interview with Democratic Party Lawmaker Kim Byung-wook
Formed 'Democratic Party Lawmakers' Group for Enhancing Global Competitiveness'
Differences on Windfall Tax Controversy... "Is It Really a Windfall?"

"Is it really a good thing for the Democratic Party of Korea to evaluate companies solely with the two words ‘fairness’ and make it the central theme of corporate policy? We decided that in addition to ‘fairness,’ we need to add concepts like ‘growth’ and ‘enhancing the global competitiveness of companies’ to create future corporate-related policies that help nurture companies."

Democratic Party lawmaker Kim Byung-wook (photo) introduced the reason for forming the ‘Democratic Party of Korea Parliamentary Group for Strengthening Global Competitiveness (Global Competitiveness Group)’ in an interview with Asia Economy on the 4th. The group was created to dispel the anti-corporate image attached to the Democratic Party and to establish a growth discourse in partnership with companies. The Global Competitiveness Group, formed by three former senior vice chairs of the Democratic Party Policy Committee, has held nine meetings with companies such as Samsung Electronics, SK, Hyundai Motor Company, LG, Hanwha, Kakao Mobility, Shinhan Investment Corp., and MBK Partners to listen to their growth secrets and discuss what efforts are needed to improve competitiveness. In this process, efforts were made not only to separate ownership and management but also to understand the advantages of owner management in large corporations.

In the interview, Rep. Kim expressed the opinion that the corporate views of Democratic Party leader Lee Jae-myung, which had been highlighted only in progressive aspects, should also be carefully examined. He said, "Leader Lee actually has a pro-business (friendly) tendency," adding, "People get confused because when he talks about basic income and youth allowances, they think he is just taking from companies, but he is quite open to creating an environment where companies can autonomously and creatively conduct business activities and generate significant profits." He continued, "However, he talks about distribution issues such as basic income in terms of how the taxes paid by companies are spent."

He also expressed a different view on the windfall tax issue being promoted by the Democratic Party. He said, "Windfall gains should have come from the sky, but the core of the recent high profits of Korean banks is that profits increased as liabilities grew," raising questions about the direction of the policy. Rather than imposing windfall taxes or levies, he said, "Increasing social contributions is more reasonable." In February this year, Rep. Kim also proposed a bill to expand the contribution of financial companies such as banks and insurance companies to the Sunshine Loan program (providing low-interest loans at 10.5% or less to low-credit, low-income citizens).

Below is a Q&A with Rep. Kim.

- What was the reason for forming the Global Competitiveness Group?

▲ Among the images attached to the Democratic Party, there is definitely an anti-corporate image. To be clear, the Democratic Party is not a class party but a party for the common people and middle class, a mass party, and a national party preparing to govern. Communicating with companies and listening to the voices of large corporations itself helps overcome the Democratic Party’s anti-corporate image. The importance of companies has increased in advanced capitalism. Economic activities revolve around companies, quality jobs are created by companies, and added value is generated through companies. Especially in the current era of global competition and technological hegemony, the importance of global competitiveness has grown. To lead in global competitiveness, large corporations that have achieved economies of scale are a major pillar.

- What is the future direction of the group?

▲ Looking at companies with global competitiveness such as semiconductors, automobiles, electric vehicles, bio, secondary batteries, and solar power, separating ownership and management was not the answer. In a fiercely competitive global environment, much more strategic judgment, quick decision-making, and large-scale investment are required. Could the current portfolio of the top 10 companies by market capitalization have been built under a professional management system? While individual punishments should be made for the deviant behavior of conglomerates, we tried to view owner management more positively under the Democratic Party’s name. Issues such as inheritance tax and employee compensation were also discussed from the perspective of enhancing corporate global competitiveness. The goal is to reflect the discussed institutional parts as much as possible in the party’s election pledges. I hope the party leadership will mention words like growth, enhancing global competitiveness, and innovation more often alongside fairness when delivering economic messages.

Assemblyman Kim Byung-wook of the Democratic Party of Korea. Photo by Kim Hyun-min kimhyun81@

- There are claims within the Democratic Party that a windfall tax should be introduced. How do you view this?

▲ The core of our banks’ profit structure is the net interest margin (NIM, the ratio of net interest income to total earning assets, indicating the financial sector’s profit-generating ability), but recently NIM has not increased. The increase in bank profits is actually due to an increase in liabilities. The increase in liabilities will eventually lead to an increase in loan losses next year or the year after. If NIM had increased, we could discuss collecting a windfall tax, but since liabilities have increased, the risk of bad debts has also grown. Increasing social contributions is more reasonable.

- There are internal disagreements about the windfall tax controversy, but this has not been addressed. What kind of discussion structure is needed?

▲ Lawmakers should express their convictions, announce policies, and complete democracy by practicing the virtues of concession and compromise centered on the National Assembly. However, in reality, our lawmakers act centered on their parties. We need to activate a discussion structure centered on the National Assembly rather than the parties. For example, in April this year, the multiple voting rights for venture companies were passed by a free vote because the party-level discussions always failed. If there are disagreements between the ruling and opposition parties, instead of blocking laws, more cases should be brought to the plenary session for free debate so that laws related to people’s livelihoods do not remain dormant. Activating the plenary session is important, and the same goes for standing committees. The more discussions are centered on the National Assembly rather than parties, the more possible it will be to find consensus through concession and compromise.