Aggressive Gov`t Action Urged to Calm Biz Jitters

Economic experts yesterday collectively urged the government to come up with measures to prevent bankruptcies among public corporations facing crisis, stressing calming market jitters in the country as soon as possible.

Min Tae-un, head of the economic policy team at the Incheon Chamber of Commerce and Industry, said, “With widespread anxiety over the economy, small and medium-size exporters cannot provide parts because they lack capital.”

Experts said the government should not demand financial institutions to unconditionally lend money to corporations but needs institutional reform, such as lowering the mortgage rate. For example, guidelines could be set on robust companies for loan rollovers or new funding to these companies, they said.

Kim Sang-chae, head of the investment support division of the Ulsan city government, said, “Last year, small and medium companies could get loans without submitting a letter of guarantee from the Small Business Corp. if they had collateral. This year, however, many face difficulty in receiving loans even with a letter of guarantee. If banks continue to avoid lending, then more companies will go bankrupt despite their profits.”

Another expert urged action to stem job insecurity. Yoon Yeong-hyeon, a director at the Gwangju Jeonnam Employers Federation, said, “The government must consider using 10 trillion won (6.9 billion U.S. dollars) of the employment insurance fund to ease job insecurity and lower the corporate burden for health insurance, national pension, industrial disaster and unemployment insurance over a certain period of time.”

Large and smaller companies must cooperate in sharing the burden of economic difficulty, and civic groups should also help, experts said.

Around 21 civic organizations in the Incheon area, including the Incheon Citizens’ Coalition Fighting Unemployment, began a campaign yesterday to promote the sale of GM-Daewoo cars. The auto company has announced a 10-day production halt at its Bupyeong factory from Dec. 20 due to a decrease in orders.

A campaign participant said, “Around 40,000 people work for GM-Daewoo and its affiliates and contractors. GM-Daewoo is a leading company contributing to 25 percent of the Incheon economy, and that is why we are trying to help.”