Chairman Dan Quayle, Chairman Stephen Schwarzman, Chairman David Rubenstein and other finance and business leaders gathered here, I am glad to meet you all.

It is my great pleasure to have a chance to introduce the Korean economy to leaders in the finance and business sector here in New York, the hub of global finance and business. It is you all who determine trends in the world economy.

Distinguished finance and business leaders,

There are some elements to consider when making decisions on investments in businesses. We closely observe whether they are healthy and have growth potential, whether there is any risk factor and, more than anything else, whether they are transparent and trustworthy.

I was born in 1953 when the Korean War ended in a truce. Korea, whose GDP at that time was a mere US$1.3 billion and per-capita income a meager US$67, was recovering from post-war ruins with the help of foreign aid. The country was too poor to aspire to democracy. Such was the situation of my homeland, the Republic of Korea, at the time.

However, the achievement of economic development and democracy that the Republic of Korea pulled off in just a half century is marvelous.

The GDP has skyrocketed by a remarkable 1,000-fold to reach US$1.4 trillion, ranking near the world’s top ten. The per-capita income is approaching US$30,000. Among newly independent countries following the end of the Second World War, Korea has become the first country in the world to transform itself from an aid recipient to a donor. 

The world calls it the ‘Miracle on the Han River’. I believe the strength of the Korean people is the defining element of the miracle.

That strength has served as a driving force to overcome economic crises. Korea has turned the global crises of capitalism into opportunities for another growth surge. After the Asian foreign exchange crisis in 1997 and the global financial crisis in 2008, the fundamentals of the Korean economy became healthier, and the country’s financial and fiscal abilities became stronger.

Korea has also restructured its economy, making it more efficient and sound by reforming the public sector, revamping industrial structures, opening markets, easing regulations and reinforcing financial supervision.

In the face of the unprecedented 1997 foreign exchange crisis, Koreans took out gold in their possession and weathered bone-crushing corporate restructuring. 

Foreign reserves that decreased way down to US$3.9 billion at that time now stand at US$385 billion, the 9th largest in the world. The sovereign debt to GDP ratio is 38 percent, one of the soundest among the OECD member countries. Equipped with a world-class information and communications infrastructure, Korea is the manufacturer of 68 of the world’s finest products. Korea’ sovereign credit rating, which had plunged to B+ at that time, has now jumped 11 notches to AA, on par with major advanced countries.  

The Korean people have also tided over the crisis in democracy in an exemplary manner. Korea experienced unprecedented political upheavals last year. The Korean people, however, took to the streets holding candles to express their determination to protect the noble democracy they had achieved. They succeeded in a most peaceful way and helped build a more mature democracy.

The new Korean Administration was launched at the call of the people who aspired to a just nation where the people are the rightful owners. 

The people who emerge stronger in the face of crises and the country that turns crises into opportunities—it is the Republic of Korea and its people.

Distinguished finance and business leaders,

Currently, the Korean economy is not without its own crisis. Since 2000, the trend of jobless growth and low growth has taken deep root in the Korean economy. The widening of the socio-economic divide that intensifies economic inequality has rapidly accelerated. Despite economic growth, the number of jobs has not increased accordingly and living conditions have not improved. Instead, economic inequality has escalated to the point where it hinders growth. 

Other advanced countries and international organizations are also agonizing over similar circumstances. At the last G20 Summit, polarization and economic inequality were the most important topics among the heads of state and government. The IMF and OECD highlighted the importance of inclusive growth that would evenly distribute economic benefits while the ILO emphasized wage-led growth, a departure from the existing economic paradigm. 

With conviction in the potential of the Korean people who have given impetus to the economy, I intend to create a fundamental economic paradigm shift to resolve structural problems. 

The starting point is yet again the “people.” In a shift in the way of thinking, the people and the household will be placed at the center of economic policies. I plan to promote job creation, an increase in household income and an innovative economy to boost growth. It is an economy that will enable everyone to have equal opportunities and enjoy the benefits of growth together. It is dubbed the “people-centered economy”.

The ‘people-centered economy’ pursued by my Administration consists of the following three pillars. 

The first pillar is ‘growth led by job creation and income’. We aim to create a virtuous cycle where household incomes rise through increases in decent jobs and household income growth boosts consumption to drive economic growth, which in turn leads to job creation.

To this end, my Administration is realigning all available policy measures concerning the budget, taxation and finance in a way that promotes job creation and household income growth. 

My Administration will also push ahead with a more aggressive fiscal policy. We are now expanding investments in projects aimed at creating jobs and have already decided on a steep increase in the minimum wage next year. We will also alleviate the burden on household budgets related to housing, education, medical services and finances.

The second pillar is ‘innovative growth’. While income-driven growth is intended to promote greater demand, our strategy for ‘innovative growth’ will focus on promoting economic growth on the supply side. 

On the foundation of our top-class information and communications infrastructure, Korea will spearhead efforts to usher in an intelligence- and information-based society, or the era of the Fourth Industrial Revolution. As part of these efforts, my Administration has established the Presidential Committee on the Fourth Industrial Revolution and created the Ministry of SMEs and Startups. 

We will foster creative minds through educational innovation and expand investments in the core technologies of the Fourth Industrial Revolution, including the Internet of Things (IoT), Big Data and artificial intelligence (AI). 

My Administration will also strive to create an innovation ecosystem that encourages the creation of innovative startups and new industries by providing businesses with assistance tailored to each stage of their growth, reforming regulations on new industries and providing venture capital and start-up assistance.

We will also increase added value in the manufacturing industry, a traditionally strong sector, by enhancing it with artificial intelligence. Along with efforts to expand smart factories, smart cities and self-driving automobiles, we will pursue energy transition and promote new and renewable energies. 

    
The third pillar of the ‘people-centered economy’ is a ‘fair economy’. 

This is about ensuring equal opportunities and fair competition for everyone. It is also about making sure that all people are able to equally enjoy the fruits of economic growth.

My Administration will root out the practice of businesses unfairly awarding orders and contracts to affiliates and will eliminate unfair trade between SMEs and conglomerates. Corporate governance will be improved to enhance transparency in management. On top of this, we will strive to make sure that mutually beneficial cooperation between SMEs and large businesses as well as reasonable practices of labor-management cooperation will take firm root. In this way, benefits will be shared and mutual progress promoted.

By guaranteeing local governments as much autonomy as in the federal system of government, we will lay the foundation for balanced regional development. These endeavors by my Administration will serve as the basis for inclusive growth and, ultimately, an inclusive democracy.

Distinguished finance and business leaders, 

Korea has grown on the strength of export-led economic policies. And the United States is the most significant of our economic partners. In fact, the United States is Korea's second-largest trading partner and biggest investment destination, and Korea, in turn, is the sixth largest trading partner of the United States.

The KORUS FTA is essential for mutual economic growth at a time when global free trade continues to expand. 

Between 2011, when the KORUS FTA had yet to take effect, and 2016, trade between our two countries increased 12 percent. During the same period, global trade decreased by 12 percent. We have also seen a significant increase in the U.S. share of Korea's import market, from 8.5 percent to 10.6 percent. As a result, an increasing amount of American beef is now consumed in Korea. Imports of American automobiles have also increased more than three times, making American automakers the second largest presence in Korea's imported car market. Exports of Korean-made cars and information and communications goods to the United States have also risen. In the trade of goods, Korea still maintains a surplus, but the United States is seeing a big trade surplus in services. Entry of Korean manufacturing businesses into the United States based on their strength and the advance of U.S. service firms into the Korean market based on their competitive edge are mutually beneficial, thus going a long way toward enhancing the competitiveness of related industries in our two nations.

In addition, the increase in investments in the United States by Korean businesses is making great contributions to job creation—a priority here, too. Hyundai Motor and Kia Motors made combined investments of US$10 billion in plants in Alabama and Georgia and created about 30,000 jobs. Samsung Electronics invested a total of US$17 billion in a semiconductor plant in Austin, Texas, and is now hiring around 3,000 employees. Needless to say, many U.S. businesses operating in Korea employ a lot of Koreans. 

It is crystal clear that the KORUS FTA is benefitting both countries in expanding trade, increasing market accessibility, boosting investments and creating job opportunities.

Recently, a special session of the KORUS FTA Joint Committee was held at the request of the United States to discuss an amendment of the KORUS FTA. Korea will engage in negotiations with sincerity. However, I hope the reciprocity of the FTA will be properly assessed.   

The United States’ trade deficit with Korea has continued to decrease since 2015 and declined more than 30 percent in the first half of this year. This trend needs to be taken into account. I am well aware of the United States’ concern, but the negotiations should be conducted in a composed manner along with an objective analysis of the result and effect of the FTA. 

Both countries are experiencing the direct benefits of the FTA. Many business leaders in both countries are showing strong support for the FTA. Korea has signed FTAs with countries and regions that account for 75 percent of the world’s GDP. Maintaining the FTA will be a necessary condition for American companies to enter the Korean market. 

We are going to have a dialogue with the United States with an open mind. However, I expect that the KORUS FTA, which is beneficial to both countries, will be firmly maintained and further developed in a mutually beneficial way.   

    
Distinguished finance and business leaders, 

I believe the U.S. business community and finance industry are also concerned about the recent nuclear and missile provocations by North Korea. 

Recently, the United Nations Security Council unanimously passed a sanctions resolution against North Korea’s sixth nuclear test in an unprecedentedly swift manner. 

The Korean Government will urge the North to give up its nuclear and missile program through various diplomatic efforts in cooperation with the international community, building upon the rock-solid Korea-U.S. alliance.  

At the same time, the Korean Government’s firm stance remains unchanged that the North Korean issue must be resolved in a peaceful way through diplomatic endeavors under all circumstances. 
 

Just as firm as the determination of the Korean Government is the market’s trust in the Korean economy, which has managed to steadily and consistently develop despite the confrontational situation with the North over the past 60 years. 

Even after the recent nuclear test by the North, the Korean stock and foreign exchange markets have remained stable after temporary fluctuations. 

The Korean composite stock price index continued to rise throughout this year and, as of September 20, there was a 19-percent increase compared to the beginning of the year. Even after the nuclear test by the North on September 3, the index rose 2.3 percent. Major foreign financial institutions forecast that the index will continue to advance to reach the target of 2,600 by the end of this year. 

The fundamentals of the Korean economy are as strong as before, and the country’s financial soundness, including sufficient foreign exchange reserves, is stable.

Despite the North Korean nuclear risk, the International Monetary Fund recently adjusted Korea’s economic growth projection for the year upward from the previous 2.7 percent to 3.0 percent, based on the country’s solid economic growth.  

I speak with confidence that this is a moment to invest in the Korean economy, which is making another leap forward. 

The Korean Government also has a vision for economic cooperation between the two Koreas and in Northeast Asia for peace on the Korean Peninsula and the economic development in Northeast Asia. Economic cooperation itself will become a foundation for peace on the Korean Peninsula and in Northeast Asia.     

In July, I announced the Berlin initiative containing the determination to achieve denuclearization and permanent peace on the Korean Peninsula. 

At the Eastern Economic Forum in Russia in early September, I announced a vision for a new northern economy.    

We have to instill an understanding in the North that the nuclear and missile program is not a path to the security of its regime or to its development. I believe that economic cooperation and development among the countries in Northeast Asia is one way to do so. If North Korea gives up its nuclear program, it will be able to easily join in the framework of economic cooperation. 

When the North abandons its nuclear and missile program and comes forward on the path to dialogue, a new economic map will be drawn on the Korean Peninsula and in Northeast Asia. Then, Korea will become an even more attractive destination for investment. 

Distinguished finance and business leaders,   

Last winter, the people of the Republic of Korea accomplished a more mature democracy through the ‘candlelight revolution’. 

Building upon that, a new economic paradigm called the ‘people-centered economy’ has begun. I am confident that Korea can play a leading role in presenting a solution to the global concerns over low growth and economic polarization.  

We will also overcome the North Korean nuclear crisis peacefully in cooperation with the international community. Many people are worried about it, but we will ride it out again and make a leap forward as we always have. 

That is the Republic of Korea and the strength of its people. I look forward to your renewed interest and participation in the Korean economy. 

Thank you.