Korea Chamber of Commerce and Industry (KCCI) recently opened the Jeju Forum, ending the event’s three-year hiatus caused by the spread of COVID-19 pandemic.
Minister of Economy and Finance and Deputy PM Chu Kyung-ho; Minister of Trade, Industry and Energy Lee Chang-yang; businessmen: and renowned scholars assembled in Jeju for three days from July 13 and discussed the future of the Korean economy.
KCCI said the 45th KCCI Jeju Forum opened on July 13 under the theme,” Explore Korea’s New Solutions to Overcome Multiple Crises.”
KCCI said the 2022 Jeju Forum had already been fully booked eight days before the deadline, as the demand by people who wanted to hear renowned experts’ solutions to multiple crises had increased.
In his opening speech, KCCI Chairman Chey Tae-won said, “A little more than one year has passed since I took office as KCCI Chairman, but it is the first time I become the chairman of the Jeju Forum.”
“When people come to Jeju, they are supposed to be relaxed, so the most people come to Jeju except Seoul thanks to relaxation,” he said.
Chairman Chey said, “There is a famous anecdote by Archimedes. He took rest in a bath, thinking of the difference between volume and weight, and had an idea changing humanity and cried ‘Eureka’ at that moment.” He expressed hope that the Jeju Forum will offer flexible thinking and a Eureka moment.
Deputy Prime Minister-MOEF Minister Chu said, “Table and shopping basket prices is likely to be stabilized around October.”
Minister Chu delivered a lecture on the direction of the new government’s economic policies at the Jeju Forum.
Chu made the prediction, saying the government was giving top policy priority to stabilizing prices.
“If the government’s lowering tariffs on beef, chicken and port down to zero percent, will cause meat prices to return to normal and vegetable crops will go to normal after the monsoon spell, prices will be stabilized slowly in the third quarter and fourth quarter.”
But as the Chuseok holiday falls on September, earlier than previous years, Chuseok prices will be precarious, he forecasted.
The Bank of Korea’s decision to raise its benchmark rate by 0.5 percentage points would contribute greatly to taming inflation expectation sentiment, Deputy Prime Minister Chu said.
“Inflation will be kept in check slowly, but the next headache will be an economic recession, and how policies will be harmonized to cope with the two things: inflation and recession will be the tasks ahead,” he said.
Deputy Prime Minister said, “The Korean economy has a weak structure, so weak structure and fundamentals need to improved.” He cited BOK’s recent data that shows the nation’s potential economic growth rate at 2 percent, which he called too weak.
Minister Chu attributed the Korean economy’s weak structure to a variety of regulations, stiffness of the labor market and a declining population.
“Korea saw household debt grow at the fast pace among OECD countries during the past five years due to failures related to real estate policies. National debts snowballed by 400 trillion won during the period,” he said.
The Year 2020 kicked off with limited policy room to take steps for low-income people’s livelihoods amid a declining economy, he said. “It is ultimately the private sector that can resurge the national economy, and if companies survive, the market will come back to life,” Chu said.
He said the government is a relatively quite an inefficient body compared to companies, and the answer is that the government needs to get leaner and reduce interference, and it ought to induce the private sector and companies to work hard to create wealth, pay taxes and create jobs.
To this end, he said, “The new government has to transform the direction of policies from a paradigm focusing the government and fiscal financing to the private sector-, company- and market-oriented one.”
Minister Chu called for drastic regulatory reform to make the national economy the private sector-oriented, dynamic one, nurturing SMEs and venture companies and making the rules of the game based on fair competition and market order.
As for regulatory reform, Deputy Prime Minister Chu said, regulations need to be overhauled to meet global standards, and the central government no longer intends to wield power, but local governments should be held responsible.
He also stressed eliminating of legal uncertainties that undermine economic activities.
As for the overhauling of the Act on the Punishment of Heavy Disasters, which causes misunderstanding, he said it is designed to make it applicable at industrial sites while ensuring industrial safety, not disregarding the safety of laborers.