Gov't vows to revive private investment
Finance Minister Hong Nam-ki, center, announces projects to revive private investment at a press conference in Seoul, Monday. Korea Times photo by Shim Hyun-chul
By Park Hyong-ki
The government will use “all its resources and energy” to revive investment by the private sector in 2019, Finance Minister Hong Nam-ki said Monday.
Hong said the administration will keep on implementing its three key policies of income growth, innovation and fair competition.
He stressed they are all important for achieving “inclusive growth.”
But the government's top priorities for 2019 are to boost innovation backed by structural reform and revive private sector growth.
“Our No. 1 priority is reinvigorating the economy by boosting private and public investment in the face of slower growth next year,” Hong told the press.
“As for the minimum wage, we are going to readjust the pace and level of future hikes.”
Hong reiterated this as President Moon Jae-in asked his ministers to look into ways to fix the problems caused by the rapid minimum wage hikes, even if the solution includes slowing these down.
Hong said the minimum wage won't reach 10,000 won per hour in two years as promised by the President.
The government will seek to restore confidence in the economy through “mega projects and deals” involving the public and private sectors.
These projects will include a 6 trillion won ($5.3 billion) infrastructure project for developing business clusters nationwide that can further spur the competitiveness of the nation's semiconductor industry and widen the gap with its Chinese competitors.
Also, it will seek to build additional global business centers with exhibition and conference halls, as well as K-pop stages to attract foreign tourists, Hong said.
The government plans to build a K-pop arena in Dobong-gu, northeastern Seoul, in 2019.
“We will push this 6 trillion won development plan forward with speed. We will have the plan ready to break ground by the end of the first quarter of 2019,” Hong said.
The budget for the development of cultural and sports facilities in regional communities will be nearly 9 trillion won in 2019, up about 60 percent from 2018, the biggest increase ever.
This will include not only building new facilities, but also upgrading old ones.
As the global economy faces a slowdown, the government will increase its financial support for exporters by providing guarantees worth 217 trillion won, up 12 trillion won from 2018, Hong said.
This will include running a program backing the exports of plants and technologies for the development of smart cities overseas.
Also, the country will negotiate with Indonesia and Russia to seal free trade deals amid a slower growth outlook and rising U.S. trade protectionism.
Tax cuts will be provided to any companies seeking to acquire startups with exceptional technologies, and the government will launch a 10 trillion won fund with venture capitalists for startups in biotechnology, artificial intelligence and big data.
Despite these projects, Hong said the country will have to brace for a slowdown.
The finance ministry projected the economy to grow by 2.6 percent to 2.7 percent in2019, with the number of jobs created to reach 150,000, up 50,000 from 2018.
This is similar to the Bank of Korea's growth forecast of 2.7 percent and 160,000 new jobs in 2019.
“We will try our best to listen closely to the private sector and come up with policies reflecting their opinions,” Hong said
.