To Extend Tax Reduction of Facilities Investments by One Year

The government decided to extend the temporary tax incentives for corporate investment, which reduces tax that amounts to 10 percent of the investment, to stimulate the corporate investments in facilities by 6 months to one year. Moreover, the government decided to carry out the social overhead capital (SOC) investment, which has big effects of stimulating domestic demand including Incheon International Airport and the second stage Gyungbu High-speed railroad project, in the first half of next year.

Deputy Prime Minster Jin Nyum reported the economic policy operation plan to the President at an economic minister`s meeting, which was presided over by President Kim Dae-Jung yesterday.

Deputy Prime Minister Jin reported, "The government would use the budget worth of 12 to 13 trillion won in December and use the budget during the first half of next year to ensure that economic growth exceeds 4 percent next year. The ministry also would finalize and carry out measures to vitalize major service industries, including tourism, culture, entertainment, leisure, sports, and design."

Deputy Prime Minister Jin also said, "The ministry will eliminate insolvent companies by evaluating the credit risk of 1,136 companies by January 15th, 2002. The ministry will issue primary collateralized bond obligation (primary CBO) and CLO amounting to 800 billion won during December, and adjust the time to issue the treasury bonds and amount in other for the companies not to have financial difficulties at the end of the year."

"The ministry plans to extend the time limit by which foreign investment companies can build factories or expand in the metropolitan area, and to ease the necessary requirements to draw foreign investment." reported Jin.

Minister of Labor Yoo Yong-Tae reported, "The ministry plans to create 155,000 jobs by spending 524.6 billion won next year to solve the youth (ages between 15 and 29) unemployment, and to provide jobs for 300,000 young people including vocational training for 145,000 young people."

President Kim instructed to carry out the measures against the youth unemployment substantially until the youth unemployment rate falls from 7.3 percent to 5 percent, saying "effective measures are necessary to increase the employment ability for the unemployed young people."

Chan-Sun Hong hcs@donga.com