Deputy Prime Minister and Finance Minister Hyun Oh-seok on Monday urged the business community to increase its spending and scale up investment plans to revive waning domestic demand in the wake of the Sewol ferry disaster.
“Consumption-related economic indicators, hit by the public’s continuing pain over the ferry disaster, are showing signs of decelerating contraction,” Hyun said during the meeting of the public-private consultation body for creative economy.
But he said cooperation between the government and the private sector was crucial to accelerate the economic recovery.
The finance minister urged other policymakers and business leaders to encourage private companies to move forward their investment plans as much as possible.
Facing a mounting public backlash in the aftermath of the deadly ferry sinking, the government announced recently that it would spend an additional 7.8 trillion won ($7.6 billion) in the second quarter as part of efforts to prop up domestic demand.
Hyun noted that economic recovery in the private sector, in particular, has been sluggish since the ferry tragedy last month.
Major retailers’ sales have continued to decline, as consumers have cut back on shopping and retailers have avoided marketing activities.
He reiterated Monday that the ministry would provide financial assistance to a wider range of businesses affected by shrinking domestic consumption.
Hyun also announced that the government would continue to ease regulations to boost venture start-ups and encourage entrepreneurship to help boost job creation.
But he added that streamlined regulation should not come at the expense of public safety.
“(We) will make sure that deregulation won’t affect the imperative of safety regulation,” he said.
On Monday, the Minister of Strategy and Finance also announced that the government plans to open so called “creative economy“ centers in 17 cities and provinces by 2014 to fulfill the creative economy the Park Geun-hye administration is promoting as a national agenda.
By Oh Kyu-wook and news reports