Moon vows for stronger corporate investment

President Moon Jae-in speaks during a meeting with his senior aides, Monday. Yonhap

By Do Je-hae

President Moon Jae-in sought to dispel concerns about the worsening economy Thursday, following the International Monetary Fund's (IMF) recent lowering of its growth forecast for the Korean economy to 2 percent for 2019, down from a previous estimate of 2.6 percent. The figure is the lowest forecast since 2009 in the aftermath of the global financial crisis.

Alarmed by the negative signs ― the Bank of Korea also cut its key policy rate to 1.25 percent, Wednesday ― Cheong Wa Dae hastily arranged a meeting of economy-related ministers to assess the current economic situation and discuss ways to better cope with various internal and external factors affecting the economy. During the unscheduled meeting at the Seoul Government Complex, President Moon underlined his commitment to nurturing the right environment for corporate investment. “We need to do our utmost to promote and support corporate investment and speed up regulatory innovation,” he said.

Moon urged ministries to step up efforts to increase support for the exports sector and to come up with measures to maintain or boost private investment in order to respond to the global downturn. “Recently, companies are expanding their investments in new industries such as semiconductors, displays, future cars and bio-health. This is great news for our economy. We need to keep up this flow going, he added.

Moon also reiterated the need to boost social overhead capital projects as a means to increase vitality in the private sector. “Construction investment plays a major role in improving vitality in the private sector. Instead of using artificial stimulus measures, the government has focused on construction investment that can improve the people's living conditions. We will keep moving in this direction and expand necessary construction investment.”

For this, Moon highlighted the need to increase the supply of government-backed apartment complexes to solve the housing problem for the working class and expedite the construction of more metropolitan transportation networks to ease traffic congestion and other problems. He also urged ministries to speed up other projects to improve facilities related to education, welfare and culture. Moon asked the National Assembly and local administrations to support the central government's efforts for an economic rebound.

The meeting came amid rising criticism that Cheong Wa Dae and the government have not properly dealt with the economic problems such as the job crisis among young adults and weakened exports. The main opposition Liberty Korea Party has blamed Moon's income-led growth policy for the economy's woes, but there was no mention of a turnaround in economic direction during the discussions.

Instead, the President's message contained some self-praise regarding his economic record in the area of job creation. “There were some difficulties regarding the job policy in the beginning, but as a result of the government's consistent efforts, an improved employment trend is becoming clear even amid tough conditions such as manufacturing restructuring, the aging population, and the decreasing productive population. Youth employment has been rising for the past 16 months, and women and the elderly are seeing improved employment prospects,” Moon said.

“Along with the continued efforts to expand on these achievements, we still need to focus on addressing employment problems in other age groups, and problems faced by the manufacturing and self-employed sectors. Strengthening cooperation among government agencies is essential under these circumstances.”

Cheong Wa Dae has been actively responding to the overflowing criticism of Moon's economic record recently, ahead of the general election in 2020. On Sunday, the presidential office held a briefing on the economy, but was later slammed for its overly optimistic point of view.