Government denies fault, says lack of entrepreneurship to blame
The Bank of Korea has told companies to look within themselves for reasons behind sluggish corporate spending, amid worries that the slowdown may hurt the nation’s economic growth potential. The national bank’s governor, Lee Sung-tae, said on July 28 in a forum held at the southern islands of Jeju that "as companies are increasingly avoiding risks, the growth rate of corporate investment has fallen significantly." He urged companies to take those investment risks, and stressed that the only weapon to cope with the uncertainty of the business environment is entrepreneurship. Lee’s remarks came amid argument from business circles that government regulation and anti-corporate sentiment have dampened corporate investment.Finance and Economy Minister Kwon O-kyu said in a summer forum held by the Federation of Korean Industries that, "If entrepreneurs take the lead in finding new initiatives, I think the future of our economy will be brighten." Kwon’s remarks are seen as an interpretation that the government does not take responsibility for the sluggish rate of corporate investment. Indeed, in a lecture on July 12, Lee said that "the basic reason for South Korea’s falling economic growth rate lies with investment indecision by our big companies," which are caught vacillating between investment in advanced nations and developing ones, he said. Yang Jae-ryong, head of the corporate statistics team at the Bank of Korea, added to Minister Kwon’s comments, saying that "tangible assets of manufacturers have been on a steady growth track. Even as foreign shareholdings increase, companies have been stymied from further investment by a lack of stable-profit business models."
