South Korean President Moon Jae-in pledges focus on economy, peace building efforts

South Korean President Moon Jae-in has also pledged that peace-building on the Korean peninsula will continue to expand and speed up in 2019.
South Korean President Moon Jae-in has also pledged that peace-building on the Korean peninsula will continue to expand and speed up in 2019.PHOTO: EPA-EFE

SEOUL - In a New Year's address that marks a shift towards a focus on the country's economy, South Korean President Moon Jae-in has vowed more investment in strategic, innovative industries, more help for businesses affected by rising wages, and more effort in job creation.

"This year's objective is to make the people clearly see signs in their own lives that the government's economic policy is heading in the right direction," he said in a nationally televised address on Thursday (Jan 10).

Mr Moon defended his income-led growth strategy, promising "tangible" benefits this year.

This strategy introduced by Mr Moon, along with people-oriented growth, seeks to boost the economy by adding to the spending power of consumers through increasing the average income of households. This saw the minimum hourly pay rate increased by nearly 30 per cent from 6,470 won in 2017 to 8,350 won this year (S$7.80 to S$10). However, this is feared to be slowing the economy.

Mr Moon said the government is aware of challenges to the economy but it was all the more important to continue the strategy.

"An economic policy shift can be truly frightening. It will take time and may generate controversy," he said.

"However, it is the path that we must take. We will achieve the goal of an innovative, inclusive nation by all means while sufficiently making up for any shortcomings," he said.

He also said many countries were trying to address growing income inequalities. 

"Economic inequality, also dubbed the 1 per cent versus 99 per cent society or a winner-take-all economy, is not a problem unique to us. It is a common challenge facing the entire world," he said.

 
 

"The people-centred economy and innovative, inclusive nation being pursued by my administration are precisely in line with such thinking. Our goal is to create an economy in which all prosper together on the basis of a fair economy with a level playing field, where innovative and income-driven growth enable sustainable development."

He acknowledged there were some shortcomings, especially in creating new jobs. 

On Wednesday, the finance ministry reported the country's jobless rate stood at 3.8 per cent in 2018, the highest since 2001, a Yonhap report said. The number of people employed, meanwhile, grew only by 97,000 from a year earlier, the lowest year-on-year gain since 2009.

"My administration is taking this economic situation very seriously. However, I want to emphasise that the hardships we are suffering now are even stronger proof of the need for the people-centred economy," President Moon said.

"This year's objective is to make the people clearly see signs in their own lives that the government's economic policy is heading in the right direction," he said.

He also pledged that peace-building on the Korean peninsula will continue to expand and speed up this year, with an eye on inter-Korea economic cooperation when the time is right.

The anticipated second US-North Korea summit and a reciprocal visit to Seoul by North Korean leader Kim Jong Un will be "turning points that will firmly solidify peace on the Korean peninsula", he added.

Mr Moon also welcomed Mr Kim's earlier announcement to resume the operation of the joint Kaesong Industrial Complex and Mount Kumgang resort without conditions, adding that South Korea will work with the international community to resolve issues such as international sanctions "as soon as possible", so as to allow economic cooperation.

The connection of roads and railway linking the two Koreas will "help find new breakthroughs for our economy", he added.

Efforts to grow beyond Korea will also be expanded, as South Korea diversifies trading with South-east Asian countries under Mr Moon's New Southern Policy.