Conglomerates agree to frontload capital spending in 1st half

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SEOUL, Jan. 15 (Yonhap) -- South Korea's largest business lobby said Thursday its
members agreed to frontload their capital spending in the first-half of this year
to help the government fight off a looming recession.

The agreement was reached at this year's first meeting of the Federation of
Korean Industries, which represents business conglomerates, or chaebol, such as
Samsung and Hyundai Motor Co.
"In line with the government's aggressive policy to spur the economy, we agree to
implement massive investment plans in the first half," FKI said in a formal
statement, without saying how much they plan to invest.
It also said that in order to help support the government's economic stimulus
programs, member companies will form an emergency economic task force that will
carefully monitor macro-economic developments, the financial and investment
sectors and the job market.
Most economic indicators have headed south since late last year and the
repercussions of the U.S. financial crisis have affected global trade and
business investments.
The FKI also said that it will take appropriate measures to work with the
government on implementing such plans as the "Green New Deal" and the development
of new economic growth engines that can best ensure sustained national growth,
fuel exports and create jobs.
The program to develop 17 hightech, value-added businesses as the country's
future growth engine calls for a 90.5 trillion won (US$65.5 billion) investment
from the private sector.
After the meeting, FKI vice chairman Jung Byung-chul said details on what
investments would be made were not announced because companies have not been able
to properly access the level of the economic slump that started to take bite in
the fourth quarter.
"All 600 members have not been able to draw out their business plans for this
year," the executive said.
South Korea's export-dependent economy has been hit hard by the global economic
crisis as the United States and Europe have slid into recession and China has
seen a slowdown in growth.
Some economists predict South Korea's economy could sink into a technical
recession this year, which would be the first such economic contraction in a
decade.
Still, the Bank of Korea expects the economy to grow two percent this year
compared with an estimated 3.7 percent expansion in 2008. The economy grew five
percent in 2007.
yonngong@yna.co.kr
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