The term “chaebolization” comes from the Korean word “chaebol” – this is the name given to a form of multi-industry trade and industrial conglomerates in South Korea, reminds RBC: In Japan, such associations are called “zaibatsu”.
The most prominent representatives of Korean chaebols include Samsung, LG, Lotte and Hyundai. According to data McKinsey estimates that the country’s top 10 chaebols accounted for 60% of the country’s GDP in revenue from 2017 to 2021.
In Russia, the trend has begun to gain momentum due to sanctions pressure and the departure of foreign brands. Domestic chaebols include Sber, Gazprombank, Yandex, MTS, etc. (analyst Anna Fedyunina, deputy director of the HSE Center for Structural Policy Research).
In Russia, “the synergy of financial, commercial and industrial capital is chaebolization in form, not in genesis,” says Vasily Osmakov, First Deputy Minister of Industry and Trade. He is also confident in the duration of the trend, since “banks have money, and therefore the opportunity to form and finance a long-term strategy for their industrial subsidiaries.”
In the early 2000s, Russia was already experiencing a chaebol boom, which included Interros, AFK Sistema, LUKOIL, Alfa Group, Russian Aluminum, MENATEP, Surgutneftegaz, and AvtoVAZ.
The new wave of chaebols, according to Belousov, is connected with the needs of the economy; it is an “inevitable and correct stage of development”: “Right now we need to create normal industrial capital, and the financial component is important for it.”
At the same time, the expert emphasizes that financial institutions need a “network of cooperation” and “sufficient potential” for the real development of industrial assets. And not a repeat of the “wild nineties”, when banks simply bought companies and did not develop them further, simply not knowing what and how to do.
“Chaebols, being very large structures, can make decisions within the group more quickly. In large financial-industrial groups, there is a much higher degree of intra-company trust between enterprises, contracts are concluded more easily and quickly,” adds Fedyunina.
At the same time, Belousov separately says that it is necessary to find a balancer for chaebolization, since large conglomerates are rarely capable of creating breakthrough know-how: “Small and medium-sized dynamically developing businesses that can cover risks, that can get into sectors where we are not yet, and offer new solutions will be able to balance.”
True, according to Fedyunina, it will be difficult to maintain a balance, since it is almost impossible for SMEs to compete with large corporations, and support for chaebolization is fraught with serious risks of monopolization of markets.
Cover photo: Unsplash
Source: rb.ru
