"Liquidity Support Needed for Large Corporations"…30 Economic Organizations Jointly Appeal to Government and National Assembly

Joint Proposal from 30 Economic Organizations Affiliated with the Economic Organizations Council

[Asia Economy Reporter Kim Ji-hee] Economic organizations have proposed to the government and the National Assembly that additional liquidity support should be sufficiently provided regardless of the size of the company. This is based on the point that a foundation must be created for companies to endure amid the ongoing global economic crisis caused by the novel coronavirus disease (COVID-19) pandemic.

At the regular general meeting on the 27th, 30 economic organizations belonging to the Council of Economic Organizations issued a joint proposal stating, "Due to the global COVID-19 pandemic causing lockdowns and disruptions in economic activities, South Korea, which is highly dependent on the global economy, is suffering enormous damage, especially in traditional key industries."

These organizations stated, "As the real economy continues to stagnate in consumption, exports, production, and investment, combined with inventory accumulation, corporate sales have drastically decreased, profits have declined, and losses have increased. The scale of damage is expected to become fully apparent in the second quarter. Since social and economic activities cannot avoid restrictions until treatment and vaccine development establish a cure capability, the normalization of the global economy will inevitably be delayed."

They added, "If this externally unavoidable bleeding business condition continues for a considerable period, corporate liquidity crises will worsen, and the capacity to maintain employment will become unsustainable," urging the government for policy support and the National Assembly for legislative support.

They conveyed common proposals, saying, "By fundamentally innovating our industrial structure and system, which had been weakened by the trend of high wages and low productivity, we must strengthen the domestic production competitiveness of our companies and boost investment vitality."

The proposals included additional liquidity support regardless of company size, deferral or reduction of national and local taxes, and expansion of employment retention support policies. First, the economic organizations emphasized, "Although the government's primary management stabilization funds and liquidity support were timely, liquidity support is necessary to enable companies to endure if the global economic crisis continues for a considerable period. Until business conditions normalize, support is needed to defer or reduce payments to the government and public institutions, such as national and local taxes, social insurance premiums, and electricity and facility usage fees, so that companies can at least cover essential business expenses."

Furthermore, they argued that the government's various employment retention support policies should be expanded comprehensively. They said, "To allow labor and management to adjust working hours according to on-site conditions, the flexibility of the flexible working system, which supplements the 52-hour workweek system, and the selective working system in research and development (R&D) fields should be legislated early." Regarding additional funds required to protect jobs due to COVID-19, they also stated that "these should be covered by general finances."

Addressing the 21st National Assembly, they urged, "Legislative matters to enhance corporate vitality, such as deregulation and investment activation, should be prioritized to achieve early economic recovery and strengthen international competitiveness."

This content was produced with the assistance of AI translation services.