Moon voices need to support inter-Korean cooperation following denuclearization
SEOUL, President Moon Jae-in on Thursday called for measures to support economic cooperation with North Korea, stressing a need to readjust government spending to support cross-border exchanges in case Pyongyang abandons its nuclear ambition.
"Our economy will face a great change if South and North Korean relations improve and peace is established on the Korean Peninsula. We will also need to review in advance the role of our fiscal spending to support a new economic map on the Korean Peninsula in preparation for a resumption of economic cooperation between the South and the North," the president said in a meeting with top government officials.
The meeting held at the presidential office Cheong Wa Dae was aimed at discussing the government's fiscal policy over the next five years. It was attended by 80 heads of government ministries and committees, along with ruling party leaders.
Moon's remarks came amid a thaw in inter-Korean relations following his two historic summits with North Korean leader Kim Jong-un this year.
Kim is also set to hold a bilateral summit with U.S. President Donald Trump in Singapore. The unprecedented U.S.-North Korea summit, if held, is widely expected to put an end to the North's nuclear ambition, which in turn could remove international sanctions currently imposed on the communist state.
Seoul has yet to remove its own sanctions against the North but it is widely expected to do so if the U.S.-North Korea summit, slated to be held June 12, is successful.
Unification Minister Cho Myoung-gyon vowed to thoroughly review the country's inter-Korean cooperation fund, according to Cheong Wa Dae spokesman Kim Eui-kyeom.
Cho said the government set aside about 1 trillion won (US$928 million) each year to prepare for possible reunification of the two Koreas but that only about 300 billion won actually became available, according to Kim.
President Moon also stressed the need for government spending to spearhead growth, as well as positive changes in the local market.
"Fiscal spending is a way to realize national policies. Right now, our society faces many structural difficulties, such as low-growth, polarization, low birth rate and fast aging of the population. I have repeatedly stressed the need for active government efforts to overcome such structural problems," he told the meeting, according to Cheong Wa Dae pool reports.
The president insisted his administration's economic and fiscal policies must be moving in the right direction, noting the average income of all households grew 3.7 percent on-year in the first quarter while the local economy expanded 1.1 percent over the same period.
Still, he called for efforts to further develop his three main economic strategies -- fair competition, income-led growth and innovation-led growth.
"While income-led growth and fair competition are ways to ensure more inclusive and fair growth, the foundation for economic growth comes from innovation-led growth. Therefore, income-led growth and innovation-led growth are things that must move together, not things we have to choose between," he said.
"However, there are many views that there still exists no clear outcome of or vision for innovation-led growth a year after our government launched," the president added.
He especially called for efforts to make sure the benefits of growth are broadly shared.
"Still, there are many areas where we came too short to say the people's lives are improving," Moon said, noting the average income of households in the lower 20 percent bracket has in fact decreased despite the 3.7 percent increase in the average income of all households in the first quarter.
The president said there may be many reasons for the growing polarization but the recent hike in the minimum wage could have been one of the reasons, and he speculated that the increase in the minimum wage could have reduced job opportunities for low-income earners.
"If there is a possibility that the increase could have reduced the income of low-income earners by reducing their employment or working hours, that could be an adverse effect of the wage increase, and the government will have to come up with measures to counter such effects," he said.
"I ask you to thoroughly review such a possibility and come up with more active measures to address the reduction in income of low-income earners, especially aged workers," he added.
Still, the president insisted it is too early to assume the hike in minimum wage was a main cause of the drop in income, the Cheong Wa Dae spokesman told a press briefing.
Source: Yonhap News Agency