Lee calls for gov’t oversight on prices

Politics

Published: 03 Jan. 2012, 23:36

Lee calls for gov’t oversight on prices

President Lee Myung-bak, flanked by the first lady, Kim Yoon-ok, hosts a New Year reception for high-ranking government officials and political leaders at the Blue House yesterday, including National Assembly Speaker Park Hee-tae, next to Lee, Supreme Court Chief Justice Yang Seung-tae, third from right, Prime Minister Kim Hwang-sik, second from right, and Grand National Party interim leader Park Geun-hye, far right. By Ahn Seong-sik

Following a New Year pledge to crack down on inflation, President Lee Myung-bak yesterday ordered the implementation of a price management system in which government officials will be responsible for keeping stable prices of specific goods - and be held accountable if they fail.

“Even though the prices of necessities such as cabbage rose, I have seen no one taking responsibility for it,” Lee was quoted as saying to a cabinet meeting yesterday by Park Jeong-ha, Blue House spokesman.

“There should be a firm policy that sets the price targets of goods, in particular agricultural and livestock products, and keeps the prices from rising above certain levels,” Lee was quoted as saying.

The cabinet was asked to devise the system. It was not clear what level of officials would be on the firing line.

His remarks followed a New Year’s address Monday in which Lee pledged to keep inflation within the 3 percent range. Consumer prices in Korea rose 4.2 percent for the second month last month, exceeding the government’s target range for last year of 2 to 4 percent.

Prices are rising even as people are worrying about the economy slowing down this year.

Last month, the government lowered its forecast for this year’s economic growth to 3.7 percent from the 4.5 percent it predicted six months earlier, citing the European debt crisis and a related slowdown in global economic activity.

Yesterday, foreign investment banks in Korea predicted that the Bank of Korea will cut its key interest rate by 0.1 percentage points this year to counter economic weakness. The cut could fuel inflation.

Korea also has legislative and presidential elections this year, which could lead to spending on populist programs and pressure on prices to rise.

At the cabinet meeting yesterday, Lee said prices are the most important factor for the public and officials should put their public service lives on the line to control inflation.

Lee specifically referred to the price of cabbage, which surged over 20,000 won ($17.40) per head during the cabbage crisis of 2010, caused by bad weather. He said there was no other country in the world selling cabbage at that price.

By Moon Gwang-lip [joe@joongang.co.kr]