Moon seeks to boost economic vitality
President Moon Jae-in delivers his New Year speech in a special meeting with top business leaders at the Seoul headquarters of the Korea Federation of Small- and Medium-sized Enterprises (SMEs) in Yeouido, Seoul, Wednesday. Yonhap
By Kim Yoo-chul
President Moon Jae-in said Wednesday he will take measures to boost the economy but keep his signature “income-led” growth policy alive despite ongoing controversies regarding its effectiveness.
“Past business growth models which have been effective in terms of chasing developed economies have reached a limit,” Moon said in a New Year's meeting with top business leaders at the Seoul headquarters of the Korea Federation of Small- and Medium-sized Enterprises (SMEs). “How we live together is the issue that needs to be addressed properly.”
Stressing the need to implement new industrial policies that haven't been seen before, Moon said his economic team will prioritize efforts to attain a balance between exports and local demand to transition from being an export-reliant economy.
“Upcoming new industrial policies should take a central role to lead innovation and bring value as the South Korean economy, which is facing various challenges and difficulties, needs to overcome structural limitations,” Moon said.
The meeting was attended by some 300 government officials and leaders of the country's top-tier conglomerates, including Samsung Vice Chairman Lee Jae-yong and LG Chairman Koo Kwang-mo.
Moon said South Korea is the only country to open an era of “$30,000 in per capita income” and achieve a total export volume of $600 billion last year among countries freed from colonial rule since the end of the World War II.
During his speech he offered an apology over the tepid results of his previous economic policies without elaborating. But he said his administration will stick with the basic concept of the “income-led” growth policy despite growing challenges.
“You have to wait a little bit more as this is the path that hasn't been touched and explored before,” Moon said. “Economic growth should be sustained and we can't pursue economic growth models that could widen economic polarization and wealth concentration.”
As a step to boost the local economy and create more jobs, the President said the government will apply rapid measures to create a business-friendly environment by lessening regulations and providing more administrative and financial support on research and development this year. South Korea has earmarked up to 20 trillion won for R&D.
The government has applied measures to increase the minimum wage and introduce a shorter work week. However, these brought criticism from small business owners and large companies as low-income earners _ the mainly intended beneficiaries _ felt the most pain as employers cut back hiring.