Good morning, fellow Koreans,

Now I am attending the APEC Economic Leaders’ Meeting, which is being held in Hawaii in the wake of the G20 Cannes Summit in France. Right after this meeting, I am scheduled to take part in the ASEAN Summit as well. In this way, leaders of all countries around the world are moving with a sense of urgency.

The atmosphere at the G20 Cannes Summit was quite heavy, indeed. Throughout the Summit, the G20 leaders as well as other European leaders were in a depressed mood because of fiscal crises in Greece and Italy.

The global leaders were feeling a growing sense of crisis over whether the fiscal crisis would spill over into the real economy causing further sluggishness.

Asian countries and emerging economies were left more or less unscathed by the crisis and are doing relatively well, but they are also equally anxious about the uncertain future of the global economy.

The main culprit behind such anxieties is the jobs issue.

That is because when the global economy shrinks, it is difficult to even preserve current jobs, let alone creating new jobs. The youth job shortage has become a global challenge, constituting a great cause for social concern in countries around the world. Jobs for young people are the first to bear the brunt of a slump in the real economy

The youth jobless rate in the United States has reached as high as 16 percent, and that of the EU hovers at 22 percent on average. Korea and other Asian countries as well as Germany and the Netherlands, on the other hand, are comparatively better off with 6 percent, but still have the same concern about jobs for young people.

Fellow citizens,

Recently, the fiscal crisis in Italy has been getting more serious and there is great concern that the crisis might spread across the whole Euro zone. German Chancellor Merkel once said it would take more than 10 years of pain to completely resolve the recent fiscal crisis in the Euro zone.

The global economy is now confronted with a new challenge because governments are seriously lacking in the ability to respond to crises and, worse yet, anxieties are spreading across financial markets and the real economy.

In this connection, the IMF has gradually revised downward its projections for economic growth in countries around the world. There are forecasts that advanced nations like the United States and countries in Europe will post low growth rates within the 1 percent range. Global economic growth is projected to stay at under 4 percent through next year as it has this year.

It is imperative for us to take action with a sense of crisis in preparation for a prolonged crisis.

After successfully emerging out of the global financial crisis, Korea has witnessed significant improvements in its economic capabilities to respond to crisis. Our sovereign debt is a third of the average of OECD member nations. On top of this, the foreign exchange holdings remain very sound. Thanks to the recent preemptive measures to conclude currency swap agreements with China and Japan, Korea’s emergency response capabilities have been greatly enhanced.

At a time when the global economy is faced with unfavorable conditions, Korea’s exports have increased somewhat. As a result, the nation is expected to become the 9th country in the world to surpass the US$1 trillion mark in terms of trade volume. This breakthrough is attributable to many domestic businesses’ successful efforts to sharpen their competitive edge in the international arena and diversify export markets by actively advancing into new markets.

In recognition of such endeavors, a global credit rating agency Fitch upgraded its outlook on Korea’s sovereign credit rating by a notch on the 7th, just last week. The global fiscal crisis became full blown last August. Since then, this is the first time for the agency to upgrade its outlook on the sovereign credit rating or the actual credit rating of any country with ‘A’ or above.

An increase in credit rating leads to an improvement in international creditworthiness, which will in turn facilitate borrowing on favorable terms. Foreign investors will become more willing to invest in Korea.

My fellow citizens,

Korea’s economy fares relatively well. Still, we must not let our guard down. Given our country’s economic structure characterized by high dependence on trade, any prolonged sluggishness of the global economy will inevitably have adverse ramifications on our economy. Now is high time for Korean businesses to enhance the competitive edge of their export goods and diversify export markets.

At this challenging juncture, the KORUS FTA will enlarge our economic territory and serve as a driving force in surmounting crises.

Besides increased exports, Japan and other countries will likely increase their investments in Korea, which promises to create more job opportunities. The KORUS FTA should never fall victim to political calculations. The agreement is a strategy for the survival of our country.

Following the inauguration of the Noda Administration in Japan, the expansion of FTAs has become a top priority for Japan in running state affairs. In particular, an FTA with the United States has become Japan’s overriding goal.  

The expansion of free trade will go a long way toward promoting the progress of the global economy. Once again, I urge both the ruling and opposition parties to work toward ratifying the KORUS FTA for the sake of our nation’s future.

Business leaders,

Granted these are difficult times, but I hope you will put even more efforts into making investments and proactively creating jobs. I trust that you will cooperate in the endeavor to hire more high school graduates.

It is my belief that the true entrepreneurship lies in embracing challenges and turning crises into opportunities.

Reflecting on my own experience, I saw that many growing companies made investments during a business downturn in expectation of an eventual economic turnaround. And they wound up enjoying substantially bigger growth later on.

During the 2008 financial crisis, most companies of the world cancelled or delayed investment plans. In spite of the hardships, S-Oil, Hyundai Steel and other insightful companies made bold investments, readily responding to subsequent demand from the emerging markets and bolstering their global market shares.

A similar outcome was spotted with a smaller firm in Daegu named JVM. The company suffered a loss stemming from the financial crisis, but it expanded its technological investment to double the amount originally planned. The result was vastly increased profits, not to mention that it overcame its difficulties.

The Government has already set its emergency system in motion in order to preemptively respond to an economic crisis. Particularly, the Administration is working on deregulation and R&D assistance in order to help vulnerable SMEs.

In difficult times like these, I expect that big businesses will further strive to solidify their cooperative partnership arrangements with other companies. Positive changes have begun to take place in the nation’s merchandise distribution system as well as in the relationship between big corporations and their sub-contractors. But there still is huge room for improvement.

I hope that a culture of ecosystemic development will be firmly settled in our society through voluntary efforts instead of relying solely on laws and other institutions.

My fellow citizens,

Korea is known in the international community as a country that is strong in times of crisis. The Korean people have united even more firmly when the going has been tough, turning hardships into opportunities for advancement.

During the 1997 foreign exchange crisis, the whole nation joined the gold collection campaign. During the 2008 financial crisis, the Government, business and labor joined forces all together and even instituted job sharing, setting a good example for the world.

Now is the time we should reinforce our confidence in our economy and in ourselves. Despite the global economic crisis, we need not be discouraged. Instead, we should be thoroughly prepared to meet every possible contingency and proceed with self-assurance.

Once again, let us demonstrate our potential to the world and prove that Korea is indeed strong in times of crisis.

Thank you very much.