Companies, do your partA conference to discuss measures to boost investment and create jobs was held yesterday at the Blue House, with President Lee Myung-bak presiding.
As the president promised to do when he was running for office, he met with businessmen and listened to them about the economic conditions they face.
But the meeting was not just a place for talk. The Lee administration is clearly desperate to improve economic conditions, which have been worsening during the two months since he took office.
The economic situation is very bad, indeed.
According to the Bank of Korea, the gross domestic product during the first quarter of this year increased by merely 0.7 percent point, the lowest in three years.
As conditions for trade have worsened due to higher prices for oil, the country’s gross domestic income has fallen by 2.2 percent from the previous quarter. As growth slows, in general, people start to believe that the economy is worse than it really is.
The current account deficit has continued for three consecutive months.
The number of new jobs created in March was 100,000 less than the monthly average of new jobs created last year.
On top of this, soaring prices for commodities, particularly basic necessities, has made it much tougher for people with low incomes.
The Ministry of Strategy and Finance officially announced recently that the economy has passed its peak and entered a downturn.
Yesterday, the government invited the people it trusts, the heads of economic organizations and major companies, to talk about the dire economic situation. President Lee has said he won’t boost the economy with arbitrary measures, such as a revised supplementary budget, so companies are the only ones that can restore the economy.
An economic slump can’t be avoided unless the firms make massive investments to build a bridgehead for economic growth and create more jobs.
The government is working to cut taxes and ease regulations, but such measures have a slow and uncertain effect.
That is why companies must start doing something first. Despite a worldwide downturn, Korean firms did better than they were expected to do in the first quarter.
They have the ability to make investments.
Now is the time for them to do what they promised.