I am glad to meet you all. We have had an unprecedented situation throughout this year due to COVID-19. Medical professionals and disease control agencies and their staff have had immense hardships – as well as our people who have endured inconveniences as the principal agents of epidemic prevention. We have been able to safeguard the economy and maintain at least basic daily routines thanks to the participation and sacrifices of the self-employed and microbusiness owners. Mutually beneficial cooperation between large businesses and SMEs and between labor and management has also been vital. I would like to extend my gratitude to the business leaders and members of the National Economic Advisory Council joining us here for their hard work during the year.
Today, we are gathered to discuss the direction of 2021 economic policy. Amid COVID-19-induced uncertainty, next year’s policy countermeasures will determine the future of our economy in the coming years. Looking toward the future, I hope this gathering will serve as a venue to explore the direction the Republic of Korea’s economy should take.
Despite the entire world facing difficulties, our economy has fared well, indeed. As predicted and planned by the Government, the growth rate rebounded in the third quarter. Among the OECD member states, Korea has achieved the highest growth rate this year. The country’s GDP ranking is projected to jump from 12th in the world last year to among the top ten. All of the people achieved this proud accomplishment together in trying times.
The most remarkable economic yield harvested this year has been the enhancement of the Republic of Korea’s brand value. Our achievements with democracy and human rights have laid the groundwork for Korea’s response to COVID-19 which is based on the principles of openness, transparency and democracy. As our soft power grows in epidemic prevention and control, healthcare and medical services, culture, foreign affairs and other areas, “made in Korea” products are now seen as not only reliable but also attractive. The so-called “Korea discount” that had long pestered our businesspeople has turned into a “Korea premium.”
We have imperceptibly come to stand alongside the countries that we once regarded as our distant ideal futures. We have also come to realize the fact there are a number of areas where we are actually more advanced and exemplary.
In particular, our people’s high civic awareness and sense of community are second to no other country in the world. Building on that confidence, we must make 2021 the time for the Korean economy’s grand transformation. The first step should be overcoming the COVID-19 crisis definitively. We must completely eradicate any possibility of the virus resurging by fully mobilizing our disease-fighting abilities.
The same is true for the economy. Growth has turned back to positive territory and exports are on the rise, but job recovery is still lagging due to the resurgence of COVID-19. Microbusiness owners and the self-employed are facing persistent hardships. Once we have not only economic growth but also improvement in the people’s lives can we truly say that we have completely overcome the COVID-19 crisis.
We also have to preemptively respond to rapidly changing global economic trends. Abnormal weather conditions and COVID-19 have awakened us to the seriousness of climate problems, and countries around the world are scrambling to shift to eco-friendly and low-carbon economies. Transition to a contact-free, digital economy is also gaining speed. We are now witnessing the arrival of an era when green technologies and digital capabilities determine the competitiveness of businesses and countries.
Fortunately, we have stayed a step ahead in our preparations. For instance, the manufacturing renaissance strategy has transformed our industrial structure, making it eco-friendly and smart. We have also formulated the Korean New Deal master plan, comprising the three pillars of the Green, Digital and Regionally Balanced new deals. Now is the time to produce concrete results.
The 2021 economic policy aims at fast, strong economic recovery and the grand transformation toward a pace-setting economy. Such policy measures as fiscal spending and financing should be fully mobilized, and the public and private sectors have to join forces to achieve a solid rebound for people’s livelihoods and the economy.
First of all, wherever needed, we must quickly inject the funds from next year’s expanded budget. The Government will have to speed up the distribution of the COVID-19 vaccines and consider it a top priority to swiftly deliver support to the business lines and income groups hurt by the resurgence of COVID-19. Job recovery is bound to come later than economic recovery. I hope the public and private sectors will jointly make all-out efforts to revive employment.
In addition, we have to ensure that increased liquidity in the market is channeled into investments for the future. As soon as epidemic prevention and control stabilizes, incentives should be strengthened to promote spending. Support for investments and exports should also be increased.
In particular, making housing stable for the middle class and low-income households is more important than anything. I urge you to accelerate the supply of 1.27 million housing units in the Seoul metropolitan area, including those from the 3rd new-planned city project where advance housing subscriptions start next year. I also ask you to devise various and efficient plans to increase the housing supply in urban areas with high demand, such as places near subway stations. I would like you to especially bear in mind that speed is vital for stabilizing the markets for home purchases and key money-based leasing.
To achieve the great transformation to a pace-setting economy, the structure of our economy has to be completely changed. The Korean New Deal, which we will push in earnest starting next year, will help Korean companies move toward a low-carbon economy and add digital competitiveness to industries across the board.
A pace-setting economy is one in which people’s creativity constitutes core competitiveness. We have to further expand the second venture boom that is being reflected now in the KOSPI and KOSDAQ markets. It is of paramount importance to create an environment in which entrepreneurs, workers and young adults can unleash their creativity to the fullest. The employment and social safety nets must be strengthened so that everyone can take on a challenge without fear of failure. We have to create an environment for fair competition so that people can achieve a fair outcome commensurate with the effort they make.
Last week, the National Assembly passed three core economy-related pieces of legislation, which are expected to enhance fairness – revisions of the Commercial Act and the Monopoly Regulation and Fair Trade Act, as well as the Act on Supervision of Financial Groups. These, together with the national employment support program and universal employment insurance, will become a vigorous step toward mutual benefit and inclusiveness as well as the foundation for the take-off toward a pace-setting economy. I hope that businesspeople will see the fair economy-related legislation in a positive light; it is not intended to hinder businesses but rather make them sound and boost their global competitiveness.
The direction of economic policy cannot be completed in one day. A concrete policy has to be devised and implemented quickly to produce tangible results. We must complement and develop a policy according to circumstances while constantly communicating with those on the ground to check whether it is having the intended effect.
I ask you to listen to the valuable opinions of businesspeople and members of the Advisory Council today and ensure that they are well reflected in our policy. I hope that the direction of the 2021 economic policy that we are devising together will serve as a solid springboard for the recovery of people’s livelihoods and a mutually beneficial leap forward for our economy.