South Korea will make structural reform one of its key policy objectives for next year, as it focuses on overhauling the inflexible labor market, the country's top economic policymaker said.
The remarks by Finance Minister Choi Kyung-hwan come as the government prepares its economy management plan for next year.
"The Korean economy is facing tough situations right now, internally with weak consumption and low inflation and externally with the weakening yen and China's move to slash its key interest rates," Choi told reporters Tuesday. The comments were embargoed until Wednesday.
"We will still push for structural reform and economic resuscitation simultaneously next year. Next year will become a year for catching two rabbits," he said.
He said that structural reform would include reform of the labor market that is struggling from a mismatch in demand between employers and employees.
"The workforce is the most important element in the economy, but the current problem is that workers needed in workplaces are not being well-supplied, with one side struggling to find jobs and the other struggling to find workers," he said.
The minister expressed worries about "excessive" protection of regular workers, a reason why he said many companies remain reluctant to hire more, which only results in an increase in irregular or part-time employees.
"Once you hire a regular worker, you have to guarantee his or her employment until the retirement age of 60. The salary peak system is not working well either," he said. "Rather than making it easier to fire (regular workers), there are other diverse ways that can be discussed at the negotiating table." (Yonhap)
