Lee urges business to boost spending

President Lee Myung-bak, fourth from right, attends a New Year’s event with Korea’s leading businesses that was organized by the Korea Chamber of Commerce and Industry at the COEX grand ballroom yesterday in southern Seoul. [Joint Press Corp.]

President Lee Myung-bak said that local businesses should expand investment and increase labor productivity this year to achieve balanced growth in 2011 at a New Year’s event hosted by the Korea Chamber of Commerce and Industry.

Lee added that it was crucial for both conglomerates and small and medium-sized firms to grow, with the help of labor and management.

“I’m aware that local firms are highly motivated to expand their businesses this year in terms of investment and creating jobs,” the president told some 1,000 business leaders, foreign officials and politicians at COEX in Samseong-dong, southern Seoul.

The event was attended by heads of the nation’s five business lobby groups - including the KCCI and the Korea International Trade Association - as well as the chairmen of large conglomerates, including Chung Mong-koo of Hyundai Motor Group, Chey Tae-won of SK Group and Chung Joon-yang of Posco.

While thanking businesses for their aggressive performance last year despite difficult global market conditions, Lee challenged businesses to increase domestic investments and boost productivity this year.

“The average labor productivity in the United States is $59 per hour while $49 in the European Union,” he said. “Korea’s average, however, is low at $29. It is disappointing to see such a low average, but at the same time, I also see hope for further developments that would eventually lead firms to expand domestic investment and create more jobs,” Lee said.

“Though there are concerns that the global economic recovery will slow down this year, it doesn’t mean that Korea’s economy will slow down as well,” he added, noting that many countries envy Korea for signing free trade agreements with the European Union and the U.S. last year. Lee also emphasized the importance of a “fair society” in all sectors of the nation.

KCCI Chairman Sohn Kyung-shik echoed President Lee’s remarks, calling for greater investments and exports, “which will then bring good results [this year].”

Hyundai Motor’s Chung later said the group would invest 12 trillion won ($10.6 billion) this year, up 15 percent from 2010.

By Lee Eun-joo [angie@joongang.co.kr]