Good morning, fellow Koreans ,

Today, I would like to share with you my thought on Korea’s recent economic situation. As the economy is showing some signs of recovery these days, there are some cautious speculations here and there as to whether the worst is really behind us.

A careful look tells us that the mind-boggling pace of the economic downturn has somewhat eased and that a variety of economic indicators are showing gradual improvement. For now, all this is good news, indeed. A hopeful atmosphere itself will definitely have a positive impact on the economic situation.

As a matter of fact, because Korea took bolder and swifter action than any other country, it was able to post slightly positive growth while most advanced nations recorded negative growth year-on-year. In addition, the leading economic index that is used as an economic forecast has continued to show an upward trend for three consecutive months.

Probably because of these favorable indications, expressways across the country are crowded again with holiday traffic. The department stores are bustling with shoppers as well. Some are now raising fears about looming real estate speculation.

My fellow citizens,

Nevertheless, we still have a long way to go. Now is the time when we need to make a sober and prudent assessment of the current economic situation. Let me explain why in a simple way.

To use the analogy of driving a car, the strong winds and heavy rains from the end of last year to early this year made it very difficult for drivers to see what was right in front of them, preventing cars from cruising at a normal speed. The winds now have abated a bit and cars can move more breezily, but there is still a thick fog obstructing the clear view ahead.

Many of you may remember that the foreign media said, “Koreans popped the champagne too soon,” when the country was hit by the foreign exchange crisis.

It is true that the country slacked too soon in the process of overcoming the crisis so that it was unable to successfully complete the restructuring and reforms that should have been achieved through the crisis. Their comment must have meant that. The painful memory of the credit-card default crisis is still fresh. That was triggered by the Government encouraging households to take out loans to hastily boost the economy.

As I have always stressed, our attitude in the wake of the crisis is no less important than the measures taken to overcome it. Whether we capitalize on the current crisis as a stepping stone for a leap forward or not hinges entirely on the successful elimination of the inefficiency and unnecessary excess in every corner of our society as well as on resolute reform and investments for the future.

The nation’s exports benefited from the favorable foreign exchange rate, but the positive effects are now being lost. Energy prices could rise again when the global economy makes a turnaround. These constitute such a huge concern that I cannot sleep well.

Against this backdrop, the Government is channeling all its time and efforts into investments for new growth engines and energy diplomacy to secure overseas energy resources.

As a matter of fact, various major Government policies, including those aimed at supporting the everyday lives of ordinary citizens, are sustained by the emergency fiscal spending. We cannot afford to continue to resort to such measures. In addition, even though the economic situation is getting better, it will take some more time for ordinary people to see any real improvements in terms of their daily lives and employment. In this context, I continue to worry that people might be disppointed in not seeing positive changes in their own lives as soon as they had expected.

Amidst the great distress stemming from the global financial crisis, Japan is aggressively pushing ahead with corporate restructuring, and other advanced nations are making investments in the development of new technologies. Considering these countries, we cannot afford to sit idly by even for a moment.

During my meeting with the Kazakh President last week, he said the nation is setting its oil money aside in preparation for a possible depletion of natural resources. He also made the strong suggestion that our two nations should work together in developing technologies for new renewable energies such as wind power. Even countries with abundant natural resources are making such desperate efforts. Then, what is the course that Korea, which does not produce a drop of oil, has to take?

My fellow Koreans,

Now is high time for the nation to embark on restructuring and carry out reform. Together with restructuring, efficiency in the public sector has to be greatly improved. For its part, the Government has already gotten down to work, and a tangible outcome will soon be produced.

On a number of occasions, I emphasized the need to secure flexibility in the labor market. That is because we cannot afford to leave the task on the back burner any longer.

My fellow Koreans,

I reiterate the fact that now is not a time to ease up on our state of alertness. We should never treat the current crisis situation facing the world lightly. Especially, I expect the small and medium-sized businesses to play an important role in transforming the crisis into an opportunity, strengthening the health of our economy. That is because the success of the Government’s policy objectives of creating jobs and expanding the middle class hinges on it.

Particularly, it is crucial to nurture competitive small and medium-sized businesses in the industries involving services and parts and material as well as software. It is obvious that the post-crisis the Korean economy will be determined by how many such enterprises Korea will have.

The Government, too, will not spare any effort and support to this end. The Administration has already prepared measures for advancing the service industry as part of its policy objectives. In addition, the smaller IT and other green businesses will be supported actively.

I am well aware that Korea does have many smaller enterprises that perform excellently even in this crisis situation. We have hundreds of companies that produce leading products globally. An array of Korean entrepreneurs is crisscrossing the globe day and night, diversifying markets for Korean products. Just last week, I toured Central Asian countries and witnessed with my own eyes that Korean businesses are developing overseas markets more aggressively than any other country.

This week happens to be Small and Medium-sized Business Week. I would like to take this opportunity to offer words of encouragement to the entrepreneurs and workers, who continue to create jobs, develop new technology and manufacture first-rate merchandise worldwide under difficult circumstances.

My fellow citizens,

I hear that a hill that lies past the halfway point of a marathon is the hardest to surmount. We are on that hill. Let us pull ourselves up by our boot straps to overcome the critical obstacle and reach the finish line more quickly than any other country.

Thank you very much.

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