BUSINESS

Moon says income-led growth not a choice but matter of survival

By Yonhap
  • Published : Aug 29, 2018 - 13:25
  • Updated : Aug 29, 2018 - 13:55

President Moon Jae-in again sought to promote his much disputed income-led growth policy Wednesday, calling it a matter of survival, not choice.

"We can never ensure sustainable growth with the current (economic) structure that creates polarization," the president said in a special meeting with the heads of and other officials from some 240 public organizations, including state-run firms and government commissions.

"Change is not a matter of choice but a matter of survival," Moon told the meeting held in Wonju, located some 130 kilometers southeast of Seoul, in Gangwon Province.



(Yonhap)

Moon's remarks come amid a continued dispute over the government's signature growth strategy, which seeks to create what Moon has called a virtuous cycle of increased income and increased spending that will contribute to the overall growth of Asia's fourth-largest economy.

Its critics, however, believe the new policy may lead to a slowdown by forcing local companies to cut down on employment and investment to offset increased costs.

Such concerns grew after the statistics office announced that the country added only 5,000 new jobs from a year earlier in July, compared with more than 100,000 jobs added to the market in the previous month.

The country's minimum wage spiked 16.4 percent on-year to 7,530 won ($6.79) per hour at the start of the year. It is again set to jump 10.9 percent to 8,350 won per hour from the start of 2019.

Moon on Tuesday dismissed calls to revise his key economic policy that includes innovation-led growth, insisting the minimum wage increase is only one aspect of the policy designed to boost the income of low-income workers, and that it is "already making progress to that end."

"We are currently pushing for a shift of the economic paradigm to income-led growth, innovation-led growth and fair competition.

The government will change the structure and constitution of our economy without fail by mobilizing all its available policy measures and maximize the country's growth potential," the president told the meeting with officials from public organizations Wednesday, the first of its kind since Moon took office in May 2017.

He also called for the support of the public organizations, noting their combined annual spending is 1.6 times higher than those of the government.

"Public organizations' role is very important in linking the public sector with the private sector," he said. "Also, public organizations must spearhead innovation-led growth. We must have increased support and investment for the new energy sector, smart farms and smart cities."

Moon earlier pledged to create more than 800,000 new jobs in the public sector alone before his single five-year presidential term ends in 2022.

"The government too will renew its stance. It will guarantee maximum independence so each public entity may freely challenge and innovate," he added.

The president also urged efforts to reform public organizations, noting they had long worked for those with power and not the people.

"Public organizations are located closest to the people's daily lives. They must become an organization that sincerely communicates with the people and provides them with support in times of hardship," the president said.

"Realizing social values, such as quality jobs, coexistence and cooperation, must be the business philosophy of public organizations."  (Yonhap)



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