Bullish on Economy
DPM Han forecasts 4 to 5 percent growth in fourth quarter
Deputy Prime Minister Han Duck-soo predicted that the economy is projected to grow from 4 to 5 percent after the third quarter this year.
Han, who is also the finance and economy minister, during his speech at the East Asia Forum held at the International Conference Room of the Federation of Korean Industries building in Yeouido, Seoul, Oct.6, said the economies in advanced countries tend to have their potential power reduced after an extended growth period, but in our case, the growth is slowing after reaching a per capita income of $10,000, posing a serious problem.
" The situation is serious because we are at the point where we have to find additional growth engines to make the economy go for several decades by injecting it with a shot in the arm to create a new jump," the DPM said.
He went on to say that IT, BT and other knowledge-based industries and high value-added industries like logistics and finance industries would have to be fostered for further growth to sustain growth and maintain the employment level
The government is ready, he said, to upgrade various laws and regulations in such key areas as finance, foreign exchange, labor and enterprise to international standards so that the next generation of growth engine industries might be fostered to grow with the competitiveness of the service industry strengthened to create jobs. He said strengthening the competitive edge of the service industry, which has been lagging, weakening the national competitiveness, is a topmost concern. He also said the bases of tourism, and leisure infrastructures will be expanded, along with the service industries including education, medicine and child-care to be enhanced. Other industrial sectors will be left up to open competition, he stressed.
He promised that structural reform and autonomy of universities will be pushed so that they will be able to turn out superior manpower needed by industries. The basic frame of education in the country will be internationalized to be able to produce internationalized top-class professional talents by expanding the potential of the educational system. The Ministry of Finance and Economy, in a report to the Finance-Economy Committee of the National Assembly, said the supplementary budget for this year would be around 5.1 trillion won to support the shortfall in the tax revenue and the national budget. The ministry said the government would maintain expanded framework of macro-economic policies throughout this year and take measures to cope with factors detrimental to growth including high oil prices and other external ones. In particular, the government will take measures to improve the industrial energy consumption structure and energy consumption pattern to be ready for the prolonged period of high oil prices.
The MOFE will also check the situation on the promotion of SMEs start-up businesses in the second half to perk up investment and consumption. It will also cooperate with the regulatory reform team under the Office of Prime Minister to take care of regulatory bottlenecks in the economy. Within this year, the ministry plans to come up with the 10 largest measures to open the service industry to hike value-added portion of the industry, and try to attract high value-added investment projects and Asian regional headquarters of multinational companies including R&D centers to expand foreign direct investment into the country.
The ministry also reported that it will ease tax regulations for early economic recovery and continued growth by expanding the potential of the economy and close the gap between rich and poor. The ministry will also ease various conditions for corporate mergers and split so that they would not cause trouble to those business activities. The ministry will also stream line financial regulations in such a way as to allow all financial investment and investment products in the financial market, but strengthen the protection for investors. It will draw up a draft bill by the end of this year and put it up for legislative approval in the first half of next year. nw

Deputy Prime Minister Han Duck-soo.