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Opening Remarks by President Park Geun-hye at the New Year Press Conference

Fellow Koreans,

New Year 2014, the Year of the Horse, has begun. I wish you all and your families good health and blessings throughout the year.

Over the past year since my inauguration amidst difficult economic conditions, my Administration has worked hard day and night to relieve the burdens on the people as much as possible. What we have done may not have been nearly enough, but I am deeply grateful to you all for your continued trust.

Celebrating the Year of the Blue Horse that comes around once every 60 years, I will work to make sure that the Republic of Korea has a successful year and makes an economic takeoff. I will ensure that the nation and the people will gain new vitality and move ahead.

Fellow Koreans,

This year, I will formulate a three-year plan for economic innovation and yet another growth surge with benefits that the people will be able to feel. With the success of the plan, I will help open an era of happiness for the people.

Taking it a step further, I will lay the groundwork for the unification of the Korean Peninsula to reduce social divisiveness and the resulting costs caused by the separation of the country into South and North. This constitutes a prerequisite for an era of happiness for the people.

The three-year plan for economic innovation will be carried out focusing on three major implementation strategies. First, my Administration will help create an economy with solid fundamentals through reforms to set right the ill practices rampant in our society. There have been too many wrongs rooted in our society and left unattended. For instance, the corruption in the nuclear industry with all the problems that it entailed was ignored over several decades despite the threat to public safety.

Government subsidies that are supposed to reach those in need have been leaking into the hands of the wrong persons who use every possible illegal means to get what they do not deserve. In such ways, our invaluable tax money is being wasted. To rectify such unreasonable practices and build an economy with strong fundamentals, I will work for the normalization of public institutions, fiscal and tax reform and an economy based on sound principles.

I will begin with reform in the public sector. The current debts of public organizations exceed the national debt so that some public corporations fail to even make interest payments on their debts with their operating profits.

Some increases in debt have not been caused by mismanagement of public companies alone but by the implementation of government policies. K-Water is a case in point. In carrying out the Four Major Rivers Restoration Project, the Government shifted its financial burden to K-Water. As a result, its debt swelled and its balance sheet tumbled into the red. This sort of practice will be set right as well in the future.

Still, lax and expedient management of public companies is also causing serious problems. Despite poor performances, some public corporations have squandered money on bonus payments and excessive welfare benefits. Some of them have only focused on bulking up their size by recklessly developing and investing in overseas resources. They have also carried out non-essential projects that are similar and overlapping and set up subsidiaries for the benefit of their own employees. Now is the time to set right these kinds of malpractices.

As seen in the corruption scandal in the nuclear industry, some substandard parts for nuclear power plants were used after their safety test results were fabricated. This ended up undermining public safety and caused undue damage and suffering to the people during the recent hot summer months.

As exemplified by the Korea Railroad Corporation, lax management and the longstanding tradition of recruiting sons and daughters of current workers have caused effectiveness and competitiveness to deteriorate.

Every time new Administrations came into office, they pushed their reform drives to address these issues but failed. The same mistakes should not be repeated. We must avoid imposing burdens on the people and holding back the advancement of the country. Starting with railroad reform, efforts to set right wrongs in the public sector will go into full gear this year.

Second, I will help make a dynamic, innovative economy through a creative economy. Last year, government-wide plans to realize the creative economy were drawn up. In an effort to ensure that the economy is turned into a creative economy, the Government took steps to bolster an ecosystem for starting venture businesses and opened the website “Creative Korea” to encourage creative ideas.

This year, the offline platforms of the Creative Korea website will be established. Creative Economy Innovation Centers will be installed in 17 large cities across the country so that those with good ideas will be able get help from mentors and start their own businesses. The new system will also provide assistance for businesses to sharpen their competitiveness. In addition, a Creative Economy Committee, which will be jointly led by venture businesses, SMEs, conglomerates and the Government, will be launched before long, and private businesses will spearhead the creative economy initiative.

Creating added value and job opportunities by grafting new technologies onto existing industries is another important task to realize the creative economy. The Government will further expand the “creative economy vitamin projects” to create new products and services through the convergence of such existing industries as agriculture and culture with science and technology and ICT. By doing so, it will make sure that the tangible benefits of convergence are felt at industrial sites.

To make investments in the areas of energy and the environment is critical to our future. As of now, climate change and environmental degradation are growing global issues. If we are equipped with creative ideas, however, it would be possible to turn them into opportunities to create added value and new markets. 

To this end, the development of technologies to reduce greenhouse gas emissions will be expanded. As a means to addressing environmental and energy-related problems at the same time, environment-friendly towns will be created. In such towns, electricity will be generated by utilizing new and renewable energy befitting the distinct characteristics of each region and will be sold as well.

As part of this plan, the Government aims to successfully implement pilot projects in three or four different regions and then help them spread throughout the nation through voluntary participation. In this manner, it will establish a stable energy supply system.

Third, the Government will boost domestic demand and ensure a balance between domestic demand and exports. It has now become crystal clear that it is difficult to create jobs and revitalize domestic demand by solely resorting to exports mainly driven by manufacturing industries as in the past. 

The Government will provide support for SMEs so that they will be able to expand investments and contribute to boosting domestic demand. It will intensively nurture the healthcare, education, tourism, finance and software industries. Preferred particularly by young people, these five promising service industries are known to create many jobs.

To help promote the growth of SMEs, especially strong mid-sized enterprises, the Government will help address specific difficulties in management faced at different stages of growth. In addition, financial assistance or tax benefits will be given according to the needs of businesses, thereby promoting their competitiveness.

To take it a step further, the Government will foster capable SMEs as key exporters to further sharpen our competitive edge in exports, which has so far been dependent on conglomerates.

The possibility has already been confirmed by last year’s results. The rate of export increase of SMEs, especially strong mid-sized enterprises, surpassed that of conglomerates. Their export items have also been diversified, attesting to the fact that the quality of exports has begun to improve.

As part of efforts to further encourage SMEs to advance abroad, consulting services will be provided throughout the whole process of exporting; overseas market information possessed by local export-related institutions will be provided in real time in a tailor-made fashion.

The Government will provide support for the joint advancement into overseas markets by conglomerates and their cooperating SMEs. It will also redouble efforts to support SMEs to enter new markets by utilizing conglomerates’ information and networks. On top of this, tailored financial assistance will be provided for local companies’ overseas construction projects and plant exports, thereby expanding domestic financial institutions’ joint entry into overseas markets. 

The promotion of service industries is of cardinal importance in revitalizing domestic demand. To turn around service industries, it is necessary to lift regulations that have been the biggest barrier to investment.   This year the Government will go back to the drawing board to reexamine investment-related regulations and remove all unnecessary ones. A regulation cap system will be introduced, and a regulation quota will be assigned and managed by sector. In addition, a ministers` meeting for deregulation, which I will preside over, will be newly launched to inspect by area and carry out deregulation.

To this end, joint task forces for the aforementioned five promising service industries will be created by combining similar industries. In doing so, the Government will swiftly carry out deregulatory measures it has already announced and provide one-stop services to investors from the stage of licensing to investment execution. The Government will channel all its capabilities into achieving these goals and bringing about good results.

If the three-year economic innovation plan proceeds as planned, the potential growth rate of our economy would rise to approximately 4 percent in three years. Then, we can hope to see the arrival of an era of per capita income of US$40,000. With the realization of the 70 percent employment rate, many more jobs, especially for young people and women, will be created. 

Fellow Koreans,

Another key task in national administration this year is to lay the foundation for unification on the Korean Peninsula. This is a serious hour for inter-Korean relations. Last year, the North went ahead with its third nuclear test and continued its threats of war unabated. It shut down the Kaesong Industrial Park and unilaterally cancelled hard-won plans to hold family reunions. Most recently, with such developments as the execution of Jang Sung-taek, the regime has become even more unpredictable.

Next year will mark 70 years of partition. For the Republic of Korea to reach still greater heights, it must move beyond the division of South and North and the threats of war and nuclear weapons to usher in a time of unification on the Korean Peninsula. And preparations for such a time must begin now.

The primary obstacle in preparing for a future of unification is the North Korean nuclear problem. A hindrance to unification and a threat to world peace, North Korean nuclear development cannot be allowed to continue.  The Government will work in close cooperation with neighboring countries to block the advancement of the North’s nuclear capabilities and to devise various measures for its complete dismantling. If the North takes genuine steps toward denuclearization, both South and North as well as the international community will be able to take meaningful action together, not only for real peace on the Korean Peninsula but also for shared prosperity in Northeast Asia.

Last year, despite the difficulties in inter-Korean relations, the Government responded to the suffering and hardship afflicting the people of North Korea by continuing to provide humanitarian aid. This year, such aid will be strengthened and civilian exchanges will also be expanded.

 Also last year, in an extremely disappointing turn, the planned reunions of separated families were abruptly cancelled just four days before their scheduled dates. This year, in time for the Lunar New Year, I hope the families who are now aged and have waited over the past 60 years will be able to reunite and find healing for their pain. I hope the North will allow this to happen as a solid first step in crafting a new framework for inter-Korean dialogue.

 In the days to come, if we could build a peace park in the DMZ and so tear down the walls of distrust and contention, and if we could connect a Eurasian railway and so transform the Korean Peninsula into a channel of trust and peace, we would be that much closer to making unification a reality.

 Fellow citizens,

 With the primary goal of helping the Korean people to maximize their potential, the Government will administer state affairs in a way that links the people’s happiness and national advancement in a virtuous cycle. 

 Particularly with regard to the five uncertainties facing the different age groups, namely, college entrance examinations, employment, housing, childcare and life after retirement, the Government will do all it can to provide solutions.

 For elementary and middle school students, the Government will support a free semester system as well as programs to help them find their desired vocations. For college students, support will go to education that encourages entrepreneurism. For women who have experienced career interruptions as well as for retirees, sufficient opportunities will be provided for the pursuit of lifelong learning. All of this will go to creating an environment where individuals can actively develop their potential.

 Even further, the Government will seek to make Korea a country where women do not suffer career interruptions due to childbirth and childrearing.

 Fellow Koreans,

 I am committed to listening more closely in the days ahead to people from all walks of life, in order to find solutions for their difficulties and hardships.

At this time, countries around the world are readying themselves for major changes that will impact the future of all humankind. We too must step into the currents of change, not only joining but also taking the lead. In pursuing new changes and a new takeoff, we will move toward a brighter future and greater prosperity for the Republic of Korea.

 Fellow citizens,

 I ask all of you to pool your strengths so that we can achieve economic advancement and make Korea a leading nation. I too will devote myself completely to making this a country where the people live happy and vibrant lives.

Thank you very much.

press conference 2014