In his New Year’s message, Deputy Prime Minister and Minister of the Ministry of Strategy and Finance (MOSF) Choi Kyung-hwan said, “The government will do its utmost to carry out structural reform in the public institution, labor, education and financing so that everyone can live an affluent life, and if one is made once, ensure the designing of a strong economic system that can be sustained for 30 years.”
Looking back at last year, Deputy Prime Minister Choi said the government devoted itself not to put out “embers of hope” in the face of such external and internal challenges as the slowing global economy and the fallout from the tragic sinking of the Sewol Ferry. Looking forward to the coming year, he said the national economy is predicted to improve thanks to growth momentum of the global economy, declining crude oil prices and expansionary macroeconomic policies.
But Deputy Prime Minister Choi said externally, there are many uncertainties, including the U.S. interest rate, a low yen, oil-producing economies, and internally there are warnings against household debt and major manufacturing industries’ declining competitive edge.
Furthermore, such structural tasks as the inflexible, ambivalent labor market, inefficiency in the public institution sector, an education system isolated from reality, and the self-preservation attitude of the financial sector have piled up, and now they stand in the way of the Korean economy’s progress.
“This is the reason why even though some problems are recognized, they have been held off as mid- and long-term tasks as solutions cannot be found at ease, and others are exceptions from reform in face of conflicts,” he said.
“Now there is no room to back off, and reforming deep-roofed malpractices is our mission of the times,” Choi added.
However, tide is on Korea’s side this year, helped by the fact that there are no nationwide elections, and a widespread public consensus for reform.
“Even though it’s so painful,” he said, “we have to make this year a year when we do what we should do for the future.”
Accumulated malpractices are challenges for the Korean economy, and if they are not corrected in a timely manner, people will have to pick up the bill at some point, Choi said.
“Reform is the real thing we can do, and we have to carry out reform for the future of the nation as if an old adage ‘If you do not act, no reward is given’ goes,” he said.
The deputy prime minister said the government will work toward turning round the economy with reforms and solidifying economic fundamentals, while devoting itself to offering a helping hand to youth, women, the elderly, temporary workers, self-employed businessmen and traditional markets who have come upon hard times.
2015 Work Report: Three-Year Plan for Economic Innovation
The government has published a comprehensive report on improving Korea’s economic fundamentals and balancing domestic consumption and exports. The report requires the joint cooperation of the Ministry of Strategy and Finance, the Ministry of Employment and Labor, the Fair Trade Commission, the Ministry of Land Infrastructure and Transport, the Ministry of Agriculture, Food and Rural Affairs, and the Ministry of Oceans and Fisheries.
1. Leading the way on structural reform with public institution reform
- Curb public institution excess, boost real productivity
2. Promote agreements between labor, management and government by promoting a sincere dialogue under the umbrella of 4 major labor market principles
- The four principles: skill and performance-led human resource management, irregular employee wage discrimination prevention, strong social safety net to help people get back to work, sustainable growth founded on mutual benefit and cooperation
3. Improve investment conditions by reforming regulation
- Implement systems that promote regulatory reform, such as a cost-in cost-out approach to the cost of regulations and a ‘regulation guillotine’ system
4. Transform the rental housing industry paradigm from ‘regulation’ into ‘support,’ foster private rental housing industry for middle-class
- Increase supply of public rental housings for working class, while at the same time fostering private-capital funded rental housing industry
5. Strengthen market monitoring to boost fairness across large, medium and small-sized enterprises
6. Boost future growth potential of agriculture and fisheries industries by promoting convergence and FTA utilization
- Focus on fostering marine services, such as cruises and marinas, and ease regulations, such as partially lifting the marine green belt (a marine resource protection zone)
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