Concerns over Difficulty in Seizing Opportunities for Economic Recovery

The financial world is expressing deep concern over the current economic situation.

The Federation of Korean Industries (FKI) held a September monthly meeting for top managers at the Seoul Yeouido FKI Building on Thursday afternoon and announced afterwards, “We were showing our concern for the country’s economy, which does not seem to be able to catch opportunities to reverse its trend.”

FKI directors were worried, saying, “With export growth slowing down ever since June, the trade balance is diminishing quickly and the business survey index (BSI) is deteriorating for the fourth consecutive month. There are possibilities that the gap in export slowdown will become even greater after the fourth quarter (October through December).”

Following this, they stressed that “our economic difficulties are due to structural problems resulting from a declining competitiveness, and all economic units, including the government, enterprises, and workers, must pull together to help the economy recover.”

FKI leaders said that key for economic recovery is to stimulate domestic spending and revitalize corporate investment to create jobs. In order for this to happen, they emphasized that related laws must be prepared to realize construction for company towns and the establishment of private equity funds (PEF). They also added that the draft revision for the fair trade law should not stand in the way of corporate investments, and are planning to continuously explain the financial community’s view to the government and National Assembly.

The government party’s latest policies for economic recovery, which are centered on extending financial expenditures and lowering the income tax, were judged to be “adequate measures for the time,” and the party expressed its expectation of positive effects, such as stirring up domestic demand.

The directors believe that in order to increase employment from exports and to promote domestic spending and business investment, strengthening the competitiveness in the component and basic materials industry is key, and they are planning to establish a “component and basic materials industry committee for improving competitiveness” (tentative name).

The meeting was held three months since June, and some 10 corporate leaders, including FKI Chairman Kang Shin-ho and Vice Chairman Hyun Myung-kwan, attended along with Chairmen Cho Yang-ho of Korean Airlines, Lee Joon-yong of Daelim Industries and Lee Woong-yeal of KOLON Industries. However, the leaders of the “big three groups,” Samsung, LG, and Hyundai Motors, did not attend that day.

Keuk-In Bae bae2150@donga.com