It's time to delve deeper into President Moon Jae-in's vision for the next five years.
For today's installment, we zoom in on the new administration's economic policies.
According to our Oh Jung-hee, there's visible difference in the approach compared to its
highly criticized predecessor.
The first task President Moon ordered upon taking office was forming a committee on job
creation.
And just two days after his inauguration,... the finance ministy officially confirmed...
that it could execute a supplementary budget to boost growth.
On the campaign trail, President Moon called for a new era of economic reform,... stressing
that his "J-nomics" will support economic growth with the people at the center.
"I will change the economic growth structure to one that focuses on the people, first investing
in our people... and then making companies and the nation more competitive."
"J-nomics is an economic growth plan made up of four stages.
Creating jobs will help the middle class and ordinary citizens earn more...
so that they spend more.
And in turn, this creates a virtuous cycle where the overall economy grows.
Big corporations and SMEs will have to cooperate with each other... and find strategies for
the fourth industrial revolution.
Despite difficult economic situations in and out of the country, we will be able to see
growth if all stages go smoothly."
Expansionary fiscal policies are the key.
Under President Moon, the government will double the growth rate of its fiscal spending
to 7 percent, starting this year, with further increases to come through 2020.
The government will reduce tax benefits for major conglomerates and raise corporate taxes
in line with public consensus,... while proceeding with fiscal reform.
Raising taxes for ordinary citizens will only be a last resort.
International organizations like the IMF and the OECD have already noted that Korea has
enough room to execute fiscal policy measures.
The move to inject vitality into the overall economy...
starts from the public sector taking the lead in job creation... by creating 810-thousand
jobs... and converting irregular workers to regular status.
"President Moon is going to focus on making jobs in the public sector, first, and then,
the public sector is going to induce private sector jobs.
How to make more jobs and also how to narrow the wage gap is the biggest problem, and the
biggest challenge to President Moon."
The new administration will aim to change the general business environment as well...
to guarantee the peaceful coexistence of big corporations and small and mid-sized companies.
The government will intervene to promote fair deals between big companies and their subcontractors...
while eliminating many regulations on SMEs and start-ups.
"Moon has pledged to ban big corporations from invading the markets of small business
and taking away the SMEs' piece of the pie.
Until now, deregulation has really benefited the chaebols... not SMEs or start-ups.
We are going to leave as few regulations as possible for new industries."
Overall, it's a big paradigm shift from Korea's conventional growth model.
The government's primary focus will be shifted from nurturing the conglomerates' businesses
and expanding their influence... to directly improving the livelihoods of the general public.
This is a big change, so the public will have to wait and see what it brings.
"The Korean economy has grown using the trickle-down model over the last thirty years -- that is,
we'd expect the growth of big corporates to share the benefits of their growth with small
and mid-sized companies and ordinary citizens.
But, we've all realized that this model doesn't work for Korea anymore.
We should now widen our scope to get economic stimulus from increased household income and
consumption."
"It may be two or three years from now,... the end of Moon Jae-in administration,...
or even during the next president's term for the impact to be seen.
So the people shouldn't expect results to show up immediately... and the government
should also do its best not to lose consistency in its policies."
Oh Jung-hee, Arirang News.