Finance Minister Calls for More Corporate Investment
By Lee Hyo-sik
Staff Reporter
The country's top economic policymaker is once again calling on business leaders to expand investment and create jobs, pledging to carry out planned deregulation, tax cuts and other business-friendly measures as scheduled.
In a meeting with leaders of the nation's business organizations Thursday, Strategy and Finance Minister Kang Man-soo said corporate investment is the key to an economic rebound, stressing that firms should build more plants and hire more workers, despite worsening economic conditions at home and abroad.
``To facilitate business activities, the government will make every effort to help companies through tax cuts, deregulation and other steps aimed at improving the corporate environment. We will also hold more dialogue with business leaders to hear about their concerns and do everything we can to help them,'' Kang said.
In response, Cho Suk-rae, chairman of the Federation of Korean Industries, and other heads of the business associations urged the government to introduce a range of steps to help companies cope with soaring oil prices and fluctuating foreign exchange rate.
``The government should continue to implement deregulation, tax cuts and other steps to promote corporate investment. As business conditions are expected to deteriorate further in the second half of the year, it is a must for the government to lend a helping hand in every way possible,'' Cho said.
Business leaders also expressed concerns that the government's economic agenda, including the creation of the business-friendly environment and the privatization of state-run firms, may lose momentum in the wake of recent candlelit vigils and labor strikes. They told Kang that the government should carry out planned economy-related measures as scheduled without a setback.
Minister Kang held the meeting with businesses leaders to collect various opinions on the economy and reflect them in the government's second-half economic plan to be announced next week.
The government is widely projected to revise down its 2008 economic growth projection on stagnant corporate investment and private consumption, while pushing its inflation target upward to reflect soaring prices of crude oil and other raw materials.
It expects consumer price growth to exceed 4 percent in the first half of the year, adding prices will increase at a faster pace in the latter half with international oil price increases showing no signs of abating for the foreseeable future.
The government will also likely cut its official GDP growth forecast to below 5 percent from the current 6 percent.
It is expected to revise the number of newly created jobs down to around 250,000 this year from the current 350,000, as most companies are reluctant to hire new workers amid aggravated business conditions.