By Na Jeong-ju
Staff Reporter
Prime Minister Han Seung-soo Tuesday instructed all government agencies and public firms to freeze wages, cut spending and refrain from taking overseas trips to ``share the burden with the private sector'' from the deepening economic woes.
He also instructed financial regulators to push for restructuring of the domestic financial industry in return for payment guarantees totaling $100 billion for banks' foreign currency loans.
``The public sector should change first to overcome the current economic hardships facing the country,'' Han said at a Cabinet meeting. ``The government has already frozen wages and the quota of employees at all ministries. All public firms and government agencies should also refrain from expanding their organizations in an effort to share pains with the public.''
Han said banks, which will receive payment guarantees for their foreign currency loans, will also face belt-tightening measures.
On Oct. 19, the government said it will guarantee the payment of all foreign currency loans raised by Korean lenders abroad until June next year for a period of three years, which may total $100 billion. It also plans to extend an additional $30 billion to banks and small and mid-sized exporters while pouring $770 million in taxpayers' money into the state-owned Industrial Bank of Korea to support cash-strapped small businesses.
``Banks have been urged to freeze wages for employees and cut pay and incentives for executives. However, their cost-cutting efforts are far from satisfactory,'' Han said.
During a meeting with the board of the Korea Exchange in the afternoon, the prime minister said the government will provide enough liquidity to the securities markets.
``Providing enough liquidity to the securities markets is crucial to stabilizing the financial market,'' Han said. ``The government is now taking all possible measures to prevent the financial crisis from affecting consumption and exports.''