“Preemptive Measures Against Recession”: Pres. Lee

President Lee Myung-bak convened a joint public-private meeting to boost investment and job creation at Cheong Wa Dae on Monday. Participants included Strategy and Finance Minister Kang Man-soo and a group of 28 business leaders, including Federation of Korean Industries Chairman Cho Seok-rae, Hyundai-Kia Automotive Group Chairman Chung Mong-koo and Samsung Life Insurance Chairman Lee Soo-bin. The main agenda of the meeting was to discuss measures to cope with the global economic slowdown.

The participants of the meeting reached an agreement that the government and businesses should work closely to draw up measures against the global financial turmoil, which was triggered by the U.S. subprime mortgage crisis and is expected to throw the Korean economy into recession in the second half of the year.

○ “Aggressive Investment is the Key to Overcome Slump,” Says President Lee

In his keynote speech, President Lee reiterated the importance of fresh corporate investment that can induce job creation, saying a good offense is the best defense.

At its first strategic finance meeting on Thursday, the government confirmed its internal forecast that the country is unlikely to achieve President Lee’s campaign pledge of a 7-percent economic growth in 2008, and restated once more that it would rather focus its efforts on improving the business environment so that the nation can attain the growth target in the near future.

“The purpose of today’s meeting is revamping the business environment so that it can become favorable to investment,” President Lee said. “I’m glad to hear that business leaders have decided to invest a lot more than last year in spite of bad economic conditions.”

“If you tell us your candid opinions (on stimulating investment), we will take them into account. The government will comprehensively play the role of your assistant. Relevant ministers will take into consideration your issues and problems. The ministers will report the progress to you and also listen to your difficulties at the next meeting,” Lee added.

Prior to the beginning of the new administration’s first large-scale meeting with business leaders at Cheong Wa Dae, President Lee personally offered coffee to participating businessmen in an apparent effort to create a convivial atmosphere. After making coffee for himself, President Lee poured hot water into the cup of Sohn Kyung-shik, chairman of the Korea Chamber of Commerce and Industry. After watching the scene, Lee Joon-ki, chairman of Daelim Group, and Samsung Life Chairman Lee asked the president, “Could you also fill mine, please?”

President Lee also offered coffee to LG Group Chairman Koo, who accompanied him during his recent trip to the United States. “Thank you for your hard work in the United States. I felt sorry that I had such a hectic schedule,” Lee told Koo. The president also offered coffee to Hyundai Chairman Chung.

When President Lee told Cho, who accompanied him in his trip to Japan, that the head of the Japanese Communist Party expressed his willingness to promote cooperation with Korea, Cho replied, “The chief of the Liberal Democratic Party also said that.”

○ “Preemptive Measure Necessary to Counter Economic Downturn”

Meanwhile, the government reported in the meeting that preemptive measures should be further developed to improve domestic spending as further contraction of the economy is expected in the latter half of the year. Based on the report, analysts believe that the government will unlikely seek the measures at the extraordinary Parliamentary session in April but will push to draw up an effectively revised supplementary budget as a short-term economic stimulant.

To that end, the government also promised to manage macroeconomic figures, such as the currency and exchange rates, with greater flexibility in line with the flow of the real economy; normalize financial operations and revise measures that can counter an economic crisis; and build a system that prevents and resolves difficulties that businesses face in making investment in the near future.

ddr@donga.com