Chaebol reform plan to be fixed next month

Minister of Finance and Economy Jin Nyum said August 16 that the government would study ways of concluding a free-trade agreement between Korea and Japan while making efforts to induce Japan`s parts and high-value-added industries to build plants in Korea.

He also said that he would restore the financial system and complete corporate reform within the next six months, noting that he would finalize details for the improvement of corporate governance by holding a public hearing during September.

At a meeting with heads of state-run and private economic research institutes, Jin said that the government would attract parts manufacturing industries and other high-value-added businesses that Japan is considering for overseas transfer.

Ministry officials explained that the Korea-Japan free trade agreement involves resolving conflicting interests between the two countries and that there would be great changes in bilateral trade if such a discussion enters full swing. In this connection, the Korea Institute for International Economic Policy is planning to work out ways for economic cooperation between South and North Korea, and between Korea and Japan, and submit it to the government.

"Next month, we will hold a public hearing to discuss ways of improving corporate governance before we finalized the plan," Jin said. "Corporations are required to show an attitude to change themselves with an understanding that chaebol reform is for the benefit of themselves eventually. Also, they need to pay attention to what the civic groups are saying about chaebols."

Jin pointed out that the economy could be distorted if policy-makers too heavily rely on macroeconomic indicators, resulting in a gap between statistical figures and actual economic status. "For the next six months, I will focus on strengthening fundamentals of the microeconomic sector," Jin said.

To share understanding about the current status of the economy, Jin said he would have a gathering once a month with representatives of economic research institutes.