South Korea Says Growth to Top 3%

South Korea’s chief policy adviser on Tuesday said he sees the economy growing more than 3% this year and again in 2018. “Economic growth is likely to exceed 3% this year, and I see this to be maintained next year,” Jang Ha-sung, chief of staff to President Moon Jae-in told foreign reporters in Seoul.

South Korea’s economy clocked its fastest growth in seven years last quarter, as global demand for its electronics more than offset the impact of regional geopolitical strains on trade, news outlets reported.

Jang added the government will announce measures to encourage corporate innovation and start-ups within November, while also focusing on rooting out corrupt business practices.

He said, the government plans to soon launch efforts to reform large family-owned conglomerates, adding the move will provide the basis for growth. The government “will prevent the expedient control of conglomerates to prevent abuse by company heads and their families,” he said.

“Fair competition and transparent management of companies based on a reform in the corporate ownership structure will become a driving force for the South Korean economy to take a leap forward by revitalizing the local economy,” the 64-year-old said, according to a copy of his keynote remarks released by the presidential office Cheong Wa Dae, Yonhap said.

Family-owned business groups, called chaebol, have been a subject of reform under nearly all former administrations. None, however, is considered to have succeeded despite numerous attempts to lessen what many believe to be disproportionate control over the companies by top executives and their families.

For instance, Lee Kun-hee, the bedridden chairman of Samsung Group, has only a 3.5% stake in Samsung Electronics Co., the single largest company in South Korea, but he and his family are often considered to be the rightful owners of the firm.

President Moon met with the top executives of the 15 largest firms here in July, but the meeting largely focused on creating new jobs, a key election pledge of the new president that apparently requires significant support of the leading business groups that each has dozens of large employers under their wing.

Jang said the government’s reform efforts will also target the financial sector to ensure fair competition among lenders. “The government seeks to enhance the risk-taking function of the capital market through a reform of the financial market that will help make sure the money will be funneled to innovative small or medium-sized enterprises and startups,” he said.