Sharing the Sense of Economic Crisis

Concerning “Korea`s economy has hit a snag”, Korea`s five business representative groups began to call upon the government to recognize the possibility of economic crisis and come up with countermeasures.

Leaders of the five economic groups including the Federation of Korean Industries (FKI) expressed their concerns over the nation`s economy at yesterday`s luncheon meeting, held at Myung-dong headquarters of the Korea Federation of Banks with Kim Jin-pyo, Minister of Finance and Economy and Yoon Jin-sik, Minister of Commerce, Industry, and Energy attending.

“If the local economy falls deep into recession, a recovery will be impossible”, said Son Kil-seung, Chairman of FKI, and added “Both the government and the people should recognize the urgent situation and work hard to overcome.“

“Korean businesses won`t sit on their hands. Korea`s top 13 groups plan to invest a total of 26 trillion won this year”, said Chairman Son. “Further investment of 3.6 trillion won is possible if the government works on deregulation and stabilization of financial markets.”

The commented “further investment”, referring to construction and repair of Guiheung and Hwasung factories of Samsung Electronics as well as extension of Pyongtaek factories of Ssangyong Motors, can translate into suggestive demand for deregulation in the capital region.

Pointing unstable relations between labor and management as well as inappropriate taxation as the biggest obstacle to the management, the business community ask for reducing corporate tax to 20% level as a way to facilitate investment, and additional tax relief on R&D related activities.

In addition, the business circle urged the government to swiftly address issues, such as five-day work week and industrial trainee systems, which have been a source of labor disputes.

Kim Jin-pyo, Minister of Finance and Economy, emphatically said that “The government, as seen in responding to railway workers` strikes, supports labor unions as long as they are open to dialogue and compromise, but cannot tolerate any action which resorts to force and violence.”

The minister requested visionary and proactive investment, development of technologies, and promotion of human resources.

After collecting opinions from the business community, Minister Kim will announce the government plan on managing the nation`s economy for the second half of this year.

The government and the business circle agreed to discuss difficulties in running business in Korea at a monthly meeting of vice chairmen from the five business representative groups. Vice ministers from the relevant government agencies including the Ministry of Finance and Economy and the Ministry of Commerce, Industry, and Energy will participate in the meeting.

Ki-Jeong Ko koh@donga.com