The Korea Times

Korea expected to see steep rise in national debts

By Kim Jae-kyoung A time bomb is ticking: snowballing national debt. Korea’s national debt has increased at a rapid pace, spawning fears that the country could face a debt crisis akin to the one Europe has gone through in the wake of the global financial crisis. What is of greater concern is that the pace of the debt growth is expected to gain momentum as the government must eventually spend more and more due to the rapidly aging population and possible reunification of the two Koreas. With snowballing debt, the ability of the Lee Myung-bak administration to manage the debt is being put into question. Korea has been in the limelight in the global community following the global financial crisis thanks to its fiscal soundness. In 2007, the ratio of Korea’s national debt to Gross Domestic Product (GDP) stood at 30.7 percent, well below the European Union (EU)’s 59.3 percent. However, the nation’s fiscal health has been worsening since President Lee took office and is expected to deteriorate further due to extensive expenditure on health and welfare. The national debt rose by

Nov 3, 2010By Kim Jae-kyoung

Companies

Is tax cut hanging the underprivileged out to dry?

By Kim Jae-kyoung A tax cut plan is one of the iconic policies for President Lee Myung-bak and his administration. Since his inauguration Lee has promised to generate more jobs and revitalize the economy by lowering income and corporate tax rates. But ironically, the massive tax cut policy designed to encourage businesses and consumers to invest more and spend more has marred his latest “fair society” pledge aimed at giving the same opportunities to the underprivileged, as it has failed to achieve its intended goal, only deteriorating the nation’s fiscal health. In particular, Lee’ policy has met strong criticism from opposition parties, who claim the tax cuts will only benefit the wealthy and large business groups. In fact, the government has yet to see a trickle-down effect in the economy from a tax reduction. The tax cut debate is heating up further after Presidential Chief of Staff Yim Tae-hee made it clear last Friday that the government will not withdraw its tax cut plan. His remark comes as an increasing number of GNP lawmakers have called for the withdrawal of the

Nov 3, 2010By Kim Jae-kyoung

Others

Korea advised to speak up at G20 Seoul Summit

By Kim Jae-kyoung A noted American lawyer suggests Korea should speak up at the G20 Seoul Summit to use the global gathering as leverage to increase its influence in the global community. The suggestion comes as the government has stressed that Korea will do its best to play a role of mediator at the G20 Seoul Summit slated for Nov. 11 and 12, representing the voices of emerging countries. In an interview with The Korea Times, former AMCHAM Korea Chairman Jeffrey Jones said that Korea should find ways to maintain a balance between expressing its opinion and representing other voices in the G20 process. “I believe those efforts (to represent other voices) are noble and are important particularly for those not at the table, but trying to represent too many voices can weaken Korea’s own voice and influence, so in this too, the government should be moderate,” he said. Jones, who is a senior lawyer at Kim & Chang, one of the largest law firms in Korea, pointed out that Korea is in a unique position at this summit for a variety of important reasons. “First, Korea has le

Nov 2, 2010By Kim Jae-kyoung

Companies

BOK raises 2010 outlook to 6 percent

By Kim Jae-kyoung The central bank has raised its 2010 growth outlook for the Korean economy to 6 percent from the previous projection of 5.9 percent despite bleak data indicating that the economy will undergo an uneven recovery. At a breakfast meeting with local CEOs Friday, Bank of Korea (BOK) Governor Kim Choong-soo forecast that economic growth will hover around 6 percent as the business environment has improved over the past few months. “If other variables remain unchanged, chances are the economy will grow more than 6 percent this year on the back of robust exports,” Kim said. “We are now keeping a close watch on the U.S. Federal Open Market Committee’s additional stimulus measures due next month.” He also forecast that economic growth will surpass the potential growth level of around the mid-4 percent next year. However, the top banker’s outlook is deemed too upbeat, given that the latest key data suggest that Asia’s fourth largest economy is clearly losing growth momentum amid lingering uncertainties overhanging the global economy. On Wednesday, the central

Oct 29, 2010By Kim Jae-kyoung

Companies

Economic growth slows in 3rd quarter

By Kim Jae-kyoung The Korean economy’s third-quarter growth was the slowest in one year, with exports, its main growth engine, losing steam due to the strengthening of the Korean won and a slowdown in major economies, including the U.S. and China. The economy is expected to lose momentum further in the coming quarter, with the effect of the government’s fiscal stimulus waning amid lingering uncertainties overhanging the global economy. The Bank of Korea (BOK) reported Wednesday that the nation’s gross domestic product (GDP) expanded 0.7 percent in the third quarter from the previous quarter’s 1.4 percent growth. It marked the slowest growth in a year since the GDP, the broadest measure of economic performance, grew 0.2 percent in the fourth quarter of last year. From a year earlier, the GDP expanded 4.5 percent. The latest data imply that growth is losing steam due to weak overseas demand and the fact that domestic demand has become a key driver for Asia’s fourth largest economy. “An export-led slowdown has been evident in the monthly industrial output data since Ap

Oct 27, 2010By Kim Jae-kyoung

Others

Gyeongju meeting shows G20’s here to stay

Financial crisis highlights need to strengthen central banks’ role, not diminish it The Group of 20 member nations (G20) has made some tangible progress on key issues, such as global imbalance and the reform of the International Monetary Fund (IMF), at the G20 Finance Ministers and Central Bank Governors Meeting held in Gyeongju from Friday to Saturday. The Korea Times had a joint interview with Bank of Korea (BOK) Governor Kim Choong-soo and Bank of France Governor Christian Noyer to hear inside stories of the important gathering and their insights about where the global economy is heading. The following is the full script of the interview ― ED. Gyeongju meeting Moderator: You two just finished a very important meeting with high anticipation from the public not just in Korea but also around the world. Are you satisfied with the result, about the communiqué? Noyer: I am extremely satisfied. I think everybody was very satisfied and we should be all satisfied. I think there is no period in the past where in such a short period of time we have achieved so many fundame

Oct 25, 2010By Kim Jae-kyoung

Others

The world is more secure than before crisis

France to continue exploring Korea’s ‘financial safety net’ initiative By Kim Jae-kyoung Over the weekend, Group of 20 (G20) member nations struck a deal to avert a global trade war and reform the International Monetary Fund (IMF). The move is expected to pave the way for the world to find workable solutions for the global economy in the post-crisis world. Despite the agreements, many still doubt whether the G20 process is a step in the right direction, asking themselves two key questions: Are we safer than before the global financial crisis (thanks to the G20 accords)? And is a currency war looming or is it imaginary? These two important questions are difficult to answer. The G20 released a joint statement made by finance ministers and central bank governors but the carefully wording was not clear enough to assure the public that the world is moving toward a more secure environment. Two central bank governors from the current and next G20 hosts ― Bank of Korea Governor Kim Choong-soo and Bank of France Governor Christian Noyer ― both of whom played key roles in leadin

Oct 25, 2010By Kim Jae-kyoung

Gyeongju meeting shows G20’s here to stay

Others

G20 Gyeongju meeting raises hope for Seoul summit in Nov.

― Korea to introduce practical guidelines on current account balance― By Kim Jae-kyoung The world has taken an important step to tackling global imbalance as Group of 20 member nations agreed Saturday to stop a currency devaluation race and overhaul the governance structure of the International Monetary Fund (IMF). The outcome of the G20 meeting attended by finance ministers and central bank governors in Gyeongju has raised hopes that the G20 Seoul Summit slated for Nov. 11 and 12 will bring about practical solutions to the global economy, which will help the G20 remain as a going concern. “Following the Toronto Summit in June, there have been growing doubts about the legitimacy of the G20 summit, as most of the previous gatherings were only slogan-oriented with no workable agreements and solutions,” said a source who participated in the gathering on condition of anonymity. “The significance of the Gyeongju meeting was that the G20 is now somehow given the legitimacy, which I believe is the real achievement beyond what they agreed on,” he added. “After the meeting, not

Oct 24, 2010By Kim Jae-kyoung

Companies

Korea-Japan currency feud deepening

BOK freezes key rate for 3rd month By Kim Jae-kyoung The currency feud between Seoul and Tokyo is showing signs of deepening as the nation’s top banker has expressed dissatisfaction with Japan’s finance minister for criticizing Korea’s foreign exchange policy. At a meeting with reporters Thursday following October’s Monetary Policy Committee meeting, Bank of Korea (BOK) Governor Kim Choong-soo said, “It is not desirable for one country to make comments on another country’s foreign exchange rates.” His remarks came a day after Japanese Finance Minister Yoshihiko Noda criticized the Korean government for frequent market intervention to curb the won’s rise, calling into question Korea’s leadership of the G20 summit. The central bank said that Kim’s comments were not targeting the Japanese minister but market participants believe that they were aimed at sending a warning to Japan. On the same day, the BOK kept its key interest rate frozen at 2.25 percent for the third consecutive month on growing concerns over the slowing global economy and rapid rise of the Korean won

Oct 14, 2010By Kim Jae-kyoung

Companies

Top regulator opens salvo on Shinhan chief

By Kim Jae-kyoung Financial Services Commission Chairman Chin Dong-soo made it clear Monday that the government will hold Shinhan Financial Chairman Ra Eung-chan accountable for his alleged violation of the real name transaction law. Chin confirmed that Ra used several bank accounts opened in other people’s names and indicated that 42 Shinhan executives and employees are subject to disciplinary measures. Ra has been under investigation for allegedly wiring 5 billion won ($4.45 million) to now-jailed businessman Park Yeon-cha in April 2007 under borrowed names. “We are continuing our inspection of Shinhan and will discuss who should be held accountable for the matter at an appropriate time,” Chin told lawmakers during a National Assembly inspection Monday. Chin’s remarks came a few hours after Ra made a surprise appearance before the media Monday to give an explanation for the financial regulator’s decision. At a meeting with reporters, the chairman admitted to holding such accounts under borrowed names but denied having broken the real-name financial transaction law. A

Oct 11, 2010By Kim Jae-kyoung

Kim Jae-kyoung

Read more

Korea expected to see steep rise in national debts

Is tax cut hanging the underprivileged out to dry?

Korea advised to speak up at G20 Seoul Summit

BOK raises 2010 outlook to 6 percent

Economic growth slows in 3rd quarter

Gyeongju meeting shows G20’s here to stay

The world is more secure than before crisis

G20 Gyeongju meeting raises hope for Seoul summit in Nov.

Korea-Japan currency feud deepening

Top regulator opens salvo on Shinhan chief

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