Chaebol Asked to Invest More Aggressively
By Na Jeong-ju
Staff Reporter
President Lee Myung-bak encouraged business tycoons Thursday to increase investments, create more jobs and refrain from giving wage hikes to share the economic burden with the government, which plans to freeze wages for civil servants next year, for the second time in a decade.
In a three-hour meeting with the chairmen of conglomerates and heads of major business associations at Cheong Wa Dae, the President said he expects the recent fall in oil prices to stabilize inflation and boost domestic demand. But he said that people tend not to see the situation like this, as price upturns tend to be faster than downturns.
``It is quite difficult to predict the direction of the financial market but once all uncertainties are fully exposed, companies can make aggressive investment with the expectation of it bearing fruit in three to four years, Cheong Wa Dae spokesman Lee Dong-kwan quoted President Lee as saying.
Lee expressed his commitment to increasing tax breaks and easing regulations for companies, saying his administration will make every effort to help them tide over the recent turmoil on the financial market.
He promised to take measures to strengthen communication between the government and the corporate sector to better reflect its opinions in state policies.
``I'm confident that Korea will overcome the difficulties posed by the U.S. credit crisis,'' Lee said. ``We need to respond cool-headedly to the problems. I will do all I can to help you.''
It was Lee's second get-together with the tycoons in five months. At his first meeting in late April, he promised to regularize such meetings as part of efforts to set up a more business-friendly environment.
``The President discussed various issues, including Lotte Group's plan to build its second indoor theme park and the changing global business landscape,'' the presidential spokesman said. ``Lee listened carefully to proposals and promised to reflect their complaints in policies.''
Lee forecast that the country's upgrade to the category of ``developed market'' by global index provider FTSE Group from ``advanced emerging'' status would help stabilize the local stock market.
``The upgrade will be a catalyst for the development of the local capital market,'' Lee said. ``That means foreign investors regard the Korean stock market as a more reliable investment venue. More foreigners will buy Korean stocks.''
Lee said psychological factors are largely to blame for the ongoing financial market jitters here.
``The U.S. credit crisis is jolting the entire world. In Korea, the psychological impact, rather than actual damage, seems to be largely responsible for the financial market instability,'' Lee said. ``Enterprises should be more confident about overcoming the crisis. The government will respond carefully to any problems.''