Think tank suggests incentive programs to aid Korean economy

A Seoul-based think tank said Tuesday that the Korean government should propose strong incentive programs to promote investment because exports and domestic consumption are likely to shrink.

The Korea Development Institute said in a report on the economic achievements and policy tasks of the Lee Myung-bak administration, “Exports are slowing down and domestic demand is being affected due to the European debt crisis. The situation is here to stay for the time being and likely to discourage investment. The government should prepare measures to keep the economy vibrant.”

The proposed suggestions included strong incentive schemes by the government such as tax benefits for small startups and tax exemptions for energy-saving facilities. The Korea Development Institute said the government should focus on curbing inflation by restructuring distribution channels and promoting competition, and also encouraging companies to hire through tax breaks for job creation.