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finance minister-stimulus plan

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(Globalpost/GlobalPost)

SEJONG, March 22 (Yonhap) -- South Korea's new finance minister said Friday that his ministry will come up with a package of measures next week to boost the economy's recovery and help the livelihoods of the people.

Hyun Oh-seok was officially inaugurated to lead the finance ministry earlier in the day after being nominated by President Park Geun-hye on Feb. 17. The delay was caused by a prolonged political stalemate over the government reorganization bill.

Under the bill, which passed this afternoon following nearly two months of impasse, Hyun will also serve as vice prime minister in charge of the overall economic policies.

"The ministry will finalize the measures within this month," Hyun said in his inauguration speech. "We will employ every possible policy tool and make an all-out effort to help our economy rebound as quickly as possible."

His inauguration comes amid concerns that the Korean economy might be losing its growth momentum in the face of growing uncertainty at home and abroad. Exports and domestic demand all remain in a slump and the economy is showing signs of falling into a protracted low growth phase.

South Korea's economy grew 2 percent last year, the lowest growth in three years, and many experts worry that the growth rate could fall into the 2 percent range again this year.

Against this backdrop, the envisioned measures might include an additional budget aimed at stimulating the slowing economic growth given what Hyun recently mentioned about economic stimulus measures, observers said.

During his confirmation hearing last week, Hyun hinted that he will consider a wide range of measures, including an extra budget to kick-start the economy. Government sources earlier said that they might draft an additional budget worth about 10 trillion won (US$8.93 billion).

For the longer term, the former head of a state-run think tank noted that the next five years will be a watershed point, saying, "Every day and every hour is very important for us."

In particular, he said that his policy will focus on nurturing new businesses and generating more jobs by employing science, and information and communications technologies in all industries.

"The fast-follower model will not guarantee us a better tomorrow anymore," Hyun said. "We have to apply science and information communications technologies to every industry in a way that it can generate new businesses and jobs based on creativity and innovation."

To achieve the goal, Hyun said that he will work hard to establish a market-oriented economy where principles and rules are respected.

Hyun supported installing a welfare system that can provide help for those in need for every critical step, saying, "We have to provide necessary services for those in need in order for them to be free from concerns over child raising, education, jobs and housing."

He, however, opposed raising taxes in order to finance such programs, a stance that seems to be in line with President Park, who has promised that she would not push for a tax hike to meet a possibly growing financial need for her expanded welfare programs.

"Pushing for these (welfare) programs by raising taxes would be an easy way but not a sustainable method. We need to break away from our age-old practices and reform the whole expenditure structures in line with the government's key agendas," he said, hinting that his ministry will focus on removing what is deemed to be unnecessary spending.

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http://www.globalpost.com/dispatch/news/yonhap-news-agency/130322/finance-minister-stimulus-plan-0