DPM Lee Vows to Shoot for 5 Pct Growth This Year
- To create 400,000 new jobs in the country

DPM and Minister of Finance and Economy Lee Hun-jai said on Dec.17 that employment is the topmost priority for 2005. He expressed the government's firm commitment to creating jobs, saying, "Four percent range growth is not a sufficient condition to create 400,000 jobs. Five percent growth must be achieved."
DPM Lee continued that with two to three percent growth new employment may not occur at all or jobs can even be lost. With regard to the private institutes' comments on the declining growth potential, the growth potential refers to the growth cap without inflation, he reiterated. Such being the case, the Korean economy is moving within its capacity and the inflation pressure is also temporary, he stressed. He added that China's growth potential is lower than its current economic growth rate of eight to nine percent.
Touching on the comprehensive investment project, DPM Lee clarified its concept by associating it to the Great Britain's private finance project. The UK private finance project is of the BTL(Build-Transfer-Lease) nature under which construction of military barracks, public facilities and hospitals have been encouraged.
He furthered, "If a 10 billion-won worth project is guaranteed with six percent annual return on investment, then 12 and 1/2 of the 0.8 billion-won worth projects can be taken up."
DPM Lee presented a few successful stories from the UK case. One of the many such projects granted permission to the private finance projector to use the public facilities for business purposes such as operating dancing classes on weekends. Fiscal projects may have some side effects such as an increase in duration of construction and business expenses. However, private finance projects have advantages such as competitive bids, supervision, reduction in the duration of construction and various designs.
Lee added that Japan also uses private capital in many cases. But only Korea has maintained cash-based budget injection method. DPM Lee pointed out that with the current budget system, old school facilities have to wait for 30 years for renovation.
With regard to the debate that the real estate market got cold with the introduction of the policy of heavy tax on owners of three residential houses or more, DPM Lee said. "While there is no possibility of crash of real estate prices, we need to monitor the market precisely as we have no representative statistics," mentioning that bank collaterals will not be in danger, either.
Stressing the importance of rental housing, he said brisk rental housing construction in the face of the mismatch of demand and supply in the real estate market will help the economy.
Arguing that financial investors or professional rental housing businesses should be allowed to participate in the sale of new housing , he envisaged that once the region-based rental fees forecast is available, improved quality housing will follow.
DPM Lee introduced that in Japan simple lease was lately turned into rental business and that in the United States or Europe local government as well as rental businesses build and rent out houses. He further explained that the flourishing of rental businesses will accompany a demand for houses and jobs, and a desire on the part of consumers for more space, better furniture and electronic goods.
Regarding the implementation of the second-stage of banccassurance, Lee said, "Albeit a general contour available, there still is a need for watch the situation more."
In the meantime, total value of external liabilities held by Korea declined $3.6 billion from the end of the previous quarter to $166.7 billion by the end of the third quarter. External assets totaled $268.7 billion, a sizable $11.1 billion increase in the second quarter of this year.
Long-term liabilities were up $0.9 billion to $113.8 billion in the third quarter as government loan repayments($0.3 billion), overseas loans and the value of foreign currency-denominated bond issuances by banks($1.4 billion) increased. Short-term liabilities declined $4.5 billion to $52.9 billion in the same quarter as banks repaid $3.4 billion in overseas loans and unsettled accounts. nw