Government to Front Load 100 Trillion in 2005

The government is planning to execute a 100 trillion won budget within the first half of 2005 in order to achieve five percent economic growth and create 400,000 jobs.

Also, to take into account high school and college graduates for 2005, 60 percent of the budget allocated for job creation will be front-loaded in the first quarter (January - March).

The government held a “Review Session and Advisory Meeting for the Economy and the Livelihood of the People” at Cheong Wa Dae and presided over by President Roh Moo-hyun on December 29, and settled on the plan for next year’s economic management and comprehensive investment plans, including the above mentioned points.

According to the new direction for economic management, the government projected that sluggishness of domestic consumption and investment may continue on into next year, cooling the economy even more, and fixed the total budget injection for the first quarter to be 100 trillion won with a 12.5 trillion won increase from the previous year.

This is nearly 59 percent of the major project volume (excluding ordinary expenditures like labor costs) of 170 trillion won, which will be executed through general accounts and funds.

Also, the government will be expanding the investment volume put into 12 major public enterprises, including the Korea Electric Power Corporation, to 24.6 trillion won.

To boost construction activities, the government will lead construction of 100,000 more national rental houses and begin the Gangbuk Reconstruction Project and new city development projects in Pangyo, Asan, and Paju in the first half of next year.

The government will designate two to four underdeveloped regions as cities dedicated to businesses. Also the government will provide support to existing businesses by reducing expenses and by providing a special supply of housing to expedite the development project for “company cities.”

On another note, the government is to administer macro-economic indexes next year to keep economic growth at five percent, inflation at low-three percent, unemployment at mid-three percent, and the current account surplus at 20 billion dollars.

Jong sik Kong Ji-Wan Cha kong@donga.com cha@donga.com