The Korean government should only intervene in the market to encourage competition and innovation in the private sector in an effort to overcome the country’s long period of low growth, said Thomas J. Sargent, the winner of the 2011 Nobel Prize in Economics.Once underdeveloped or developing countries catch up to advanced economies, they should turn their focus to innovation as there are fewer opportunities in copying what developed countries have done for growth, he said.Sargent, also an economi

Woori Bank has reportedly notified and gained approval from financial regulators and other creditors of STX Corp. to unload and sell-off its equities of STX and ForceTec Woori received as collateral for loans extended to ForceTec.The conglomerate’s chairman Kang Duk-soo, whose key subsidiaries such as shipping and shipbuilding are teetering on the edge of bankruptcy due to the debt overhang, had put up his equity ownerships of about 11 percent in STX and its de facto IT and logistics parent Forc

Japanese stocks, bonds and exchange rate have lost momentum over the past weeks, a sign that the effect of its monetary and fiscal stimulus, or part of the so-called “Abenomics,” may be letting up.Japan’s Nikkei225 falling more than 7 percent on May 23 was a wake up call to investors and financial policymakers as the benchmark continued its decline toward 13,700 from 15,000 over the last six trading days.Yields on Japan’s state bonds touched 1 percent, while their value has dropped, increasing t

Korea’s ranking in terms of economic competitiveness remained unchanged at 22 among 60 countries in 2013 for the third straight time, according to the Switzerland-based International Institute for Management Development.Asia’s fourth largest economy earned high marks for having a high education level, skilled workforce and reliable infrastructure.However, it received poor scores in the areas of cost of living, tourism and direct investment flows.Its weaknesses also included having high tariff ba

The National Tax Service said Wednesday that it has officially launched a probe into 23 individuals and companies suspected of evading tax payments through their accounts via paper companies set up in tax havens. Of the 23, eight may have allegedly avoided paying taxes through ghost companies in the British Virgin Islands, another eight people via Hong Kong and the rest through offshore accounts in Panama, it noted.It remains to be seen whether the list of 23 include those holding tax haven acco

Pernod Ricard Korea plans to collaborate with Korea Maritime University in preserving the marine environment in Busan.The Korean unit of France’s beverage giant said Wednesday that it had inked a memorandum of understanding with the university to launch the project. Officials promised to support environmental research in Busan over the next three years.The company said it will put 1,000 won ($0.88) from each sale of Imperial Classic 12 City Edition-Busan, a brand exclusively for regional consume

Korea saw its income inequality surpass the average of OECD members, raising concerns over the widening economic disparity between the rich and poor.Korea’s top 10 percent group earned 10.5 times the income of the poorest 10 percent, over the OECD average of 9.5 times in 2010, the Paris-based international organization said.The increased inequality led Asia’s fourth-largest economy to rank ninth among OECD members.Mexico showed the biggest gap with the richest 10 percent earning 28.5 times more

Korea’s state-run funds that manage employment insurance, workers’ safety insurance, agriculture assets, and arts and culture businesses scored “low” in the government’s evaluation of sovereign management trusts, the Ministry of Strategy and Finance said Tuesday.In a report of over 140 funds to Cabinet members, the Finance Ministry said they performed below average in part due to a lack of professional human resources that can manage those funds worth some 14 trillion won ($12.4 billion).Meanwhi

The Korea Center for Investigative Journalism unveiled on Monday its second batch of seven Koreans, connected to four notable conglomerates in the country, holding offshore accounts via paper companies set up in tax havens.The seven were found to be incumbent and former executives of chaebol, and are expected to be scrutinized by the National Tax Service for any signs of tax evasion or avoidance through those ghost companies.They are: Choi Eun-young, chairwoman and CEO of Hanjin Shipping; Cho Yo

Korea should brace for increased capital-flow volatility in the stock and bond markets stemming from the possibility of the U.S. and other advanced economies exiting monetary stimulus in the near future.There would be tumbles on global benchmark equities as seen with Japan’s Nikkei 225 index that fell more than 7 percent, Bank of Korea Gov. Kim Choong-soo warned investment bankers in a meeting on Friday.Japan’s benchmark stock index suffered its highest drop in 13 years on Thursday due to a vari

More than 200 Koreans, including corporate executives and conglomerate owners, are expected to come under scrutiny by state tax auditors after being exposed as holding offshore accounts and assets in tax havens.The Korea Center for Investigative Journalism, a non-profit, independent news agency, said Wednesday that 245 Koreans currently owned paper companies, or ghost assets, in the OECD-designated tax havens, including the British Virgin Islands and the Cayman Islands.It disclosed in its first

Korea is looking to engage Russia with a new set of foreign and economic policies that it hopes will lead to the restart of their free trade negotiations.Deputy Prime Minister and Finance Minister Hyun Oh-seok said Tuesday that Korea would need to readjust its foreign and economic policy, and implement so-called “New Nordpolitik” toward Russia.South Korea’s Nordpolitik was first adopted by the administration of former President Roh Tae-woo to engage communist countries or allies of North Korea,

NHN, Korea’s biggest search engine operator, is coming under mounting pressure by state regulators as the country’s antitrust agency has further expanded its probe into not only the company but also its subsidiary.The Fair Trade Commission has reportedly launched an additional investigation into NHN Business Platform, a wholly-owned search advertising operator of NHN.NHN has increasingly been in the spotlight lately following the FTC’s full-scale probe into the company to find out whether it abu

Korea’s antitrust agency has taken disciplinary measures against five domestic agriculture equipment manufacturers for price collusion.The Fair Trade Commission said Monday it would levy combined fines of some 23.5 billion won ($2110 million) against the five for price fixing products such as combine harvesters, rice planters and tractors.The five companies are: Kukje Machinery, Daedong, Tongyang Moolsan, LS, and LS Mtron. Of the five, the FTC will also seek to have four ― Kukje Machinery, Daedo

An increasing number of both Korean and Japanese companies are opting to settle their bilateral trade with the world’s key currency ― the U.S. dollar ― over the Japanese yen.This is due to Japan’s weakening currency since the world’s third largest economy launched fiscal stimulus along with aggressive monetary easing to recover from its two-decade-long stagnant growth.A weaker yen would result in foreign exchange losses for those companies trading goods between the two sides as currency deprecat

Japan’s economic growth rate is expected to surpass that of Korea for the first time in 15 years as the world’s third-largest economy gains momentum based on the yen’s rapid depreciation.Japan’s economy has been recording unexpected growth over the last couple of years, while Korea has been performing below market expectations, according to data from central banks in Korea and Japan.Korea’s GDP growth had fared well in comparison to Japan until 2011. Asia’s fourth-largest economy posted above it

The government is expected to make a sweeping overhaul of regional spending and subsidies as it seeks to balance the budget through expenditure cuts.It is looking to cut annual spending worth about 55 trillion won ($49 billion) for nearly 1,000 regional projects, including infrastructure development.Economic-related ministries, including the Ministry of Strategy and Finance and the Ministry of Land, Infrastructure and Transport, reportedly proposed cuts in infrastructure spending of about 10-12

NHN, Korea’s largest search engine operator, has completed its liquidation of its overseas assets based in the tax haven of Cayman Islands, according to a public disclosure filing.The portal giant’s NHN Global, established in 2004 on the islands, is said to have shut down after converting its assets worth some 19 billion won into cash up until early this year. As of last Wednesday, NHN Global is now off the books.The operator of Naver set up its Cayman Islands-based entity after investing in a j

President Park Geun-hye called for the government to achieve a fiscal balance within her five-year term, stressing the need to promote efficient yet sound fiscal spending and management.Presiding over her first meeting with ministers on the nation’s fiscal management, Park said the government needs to make fiscal reforms by first redesigning its spending so that the government can bring the national debt ratio under the mid-30 percent level of the gross domestic product. The nation’s debt-to-GDP

The government plans to offer better tax breaks and incentives for investors and entrepreneurs investing and launching innovative start-ups as part of efforts to sustain the economy.The Ministry of Strategy and Finance announced a package of measures to boost venture investments and support mergers and acquisitions after holding a meeting of economy-related ministries Wednesday. The ministry said that it would allow investors and entrepreneurs to push back payments of capital gains tax when re-i