Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
President expresses regret over housing turmoil
President Moon Jae-in speaks during a press conference at Cheong Wa Dae in Seoul, Monday. Yonhap
By Lee Min-hyung
By Lee Min-hyung
President Moon Jae-in acknowledged Monday the capital's housing market turmoil, but added he will try to soothe such concerns by announcing new measures in terms of the supply side.
“The focus of our policies was on curbing real estate speculation, but it wasn't enough to stabilize the market,” Moon told reporters during a nationally televised New Year's press conference at Cheong Wa Dae.
Demand for apartments has surged for the past year, as excessive liquidity before and after the coronavirus outbreak has flown into the real estate market and pushed up housing prices, according to the President.
But he reaffirmed his stance toward tightening housing regulations to control demand for speculative buying, and pledged to come up with and announce “special” housing supply measures soon.
He also said “now is not the right time” for the government to provide a fourth round of anti-coronavirus emergency funds for the public.
The remark came in response to Gyeonggi Governor Lee Jae-myung's impending announcement of a plan to offer 100,000 won ($90.46) for all residents in the province. Lee was supposed to hold a press conference on the same day to confirm the plan, but canceled the event amid a request from the ruling Democratic Party of Korea (DPK).
“It is too early for us to discuss the fourth emergency relief fund,” Moon said. The plan, if it actually happens, may force the central government to prepare another supplementary budget and issue treasury bonds. The government already executed a fourth round of expansionary fiscal policies in 2020 against the virus-induced economic fallout, according to the President.
The message came amid growing concerns over the nation's surging sovereign debt. As of the end of last November, the national debt reached a record high of 826.2 trillion won, up by 13.4 trillion won from the previous month, according to data from the Ministry of Economy and Finance. This exceeds the government's earlier forecast by 11.3 trillion won. Even if the step was mostly aimed at helping those severely hit by the virus shock, concerns are mounting over how the government can handle the worsening fiscal soundness.
“The execution of the 2021 budget is still in its infancy, so it is premature for the government to mention the fourth relief fund as of now,” he said.
But Moon left open the possibility for the government to offer a fourth emergency fund if those vulnerable to the continued virus spread ― including the self-employed ― continue to suffer economic damage.
“Under the scenario, it is appropriate for us to offer selective fund assistance by picking such vulnerable groups,” Moon said. The government can also offer the fund universally when the coronavirus comes to an end, to boost consumption nationwide, the President said.
He also expected the passage of three so-called “fair economy” bills to pave the way for the nation's economic democracy. The bills were devised to reform the chaebol-driven economic ecosystem here. Chaebol refers to Korea's family-owned conglomerates. The chaebol reform was one of Moon's top economic policy goals amid unceasing controversies on chaebol's unfair and undue pressure on their subcontractors.
When asked over plans to take additional steps in pursuing the reform of chaebol business structures, he said he would keep watching how the bills take effect in the industry.
“I believe the passage of the bills will play a big part in achieving democracy of conglomerates' governance structures and fostering a fair economy between big and small companies,” Moon said.
He also raised a safety issue on worksites, underlining that subcontracted workers should never continue to be exposed to potential risks at worksites.
“One important factor when discussing the chaebol issue is that no one should die anymore while working,” he said. “Industrial disasters continued to occur when big firms outsourced risks to subcontractors, and did not take any responsibility for these outsourced risks.”
Even if the bills have room for improvement not just on the side of labor, but also companies' management, it is still meaningful that legal and institutional reforms on the long-standing issue have been completed, according to the President.
“We have taken the first step on the issue, even if labor groups still consider the bills insufficient and business circles step up their criticism that this hampers their management activities,” he said.
“While enforcing the laws, we believe we can supplement and develop what is missing,” the President said. “Any safety issues on worksites will also keep being improved.”
Plus, the President also expressed confidence that the economy would be able to bounce back to a level matching that before the virus outbreak no later than the end of the first half of 2021.
“Most OECD member nations reported recession in 2020, but Korea defended well and reported a top-level growth rate,” he said. “But this does not mean that the economy is good enough for the public to realize.”