(LEAD) S. Korean economic sentiment improving on low rates, oil prices: finance minister

(ATTN: UPDATES with more info, comments in paras 5, 7-9; ADDS Photo, Creative Economy Valley building plan in last 5 paras)

SEONGNAM, South Korea, March 30 (Yonhap) -- South Korean economic sentiment has been improving on e back of lower interest rates and oil prices, the country's top economic policymaker said Monday.

Finance Minister Choi Kyung-hwan said at a meeting of economy-related ministers in Seongnam, south of Seoul, that low prices are exerting a positive influence on households and businesses that can boost how the general public views the economy. A positive outlook on the economy can boost consumption, industrial production and investment.

He also said that there are signs that the country's real estate and stock markets are gaining some ground, even though the overall pace of recovery remains weak and inconsistent.

Choi, who doubles as deputy prime minister, then urged all government ministries to do their utmost not to capitalize on the present situation and move aggressively to breathe new vibrancy into the economy.

The minister added that a "virtuous business eco-system" actually contributes more to the competitiveness of a country as a whole than the prowess of individual businesses that are successful on a global scale. He said creating a viable eco-system is critical for South Korea since the United States is tightening its grip in new cutting edge industries and pulling away from the competition, while Chinese companies are making strides to improve their technological capabilities, which is eroding Seoul's industrial edge.

He argued that while differences remained, it is high time that a compromise is reached on labor market reforms. Labor and business representatives as well as government officials have been in the process of ironing out an agreement that can allow more flexibility in the country's labor market.

"I anticipate the tripartite talks will reach a grand compromise that can give hope to young people," Choi said.

The original deadline for the talks, which have received flak for not being fully represented by workers, ends this month.

Government officials have persistently claimed understanding on reforms must be reached as soon as possible and that only by getting rid of the "dual labor market" can there be hope for young job seekers.

The dual labor market refers to the gap between full-time regular employees who enjoy "excessive" job security and good pay vis-a-vis non-regular workers whose employment is tenuous and are usually paid less than their regular employee counterparts.

Besides highlighting economic developments and the need to push forward reforms, policymakers at the meeting announced the finalized plan to speed up construction of the new Creative Economy Valley in Pangyo, south of Seoul.

The plan first announced last July, calls for creating a high-tech industrial park, that can be linked with the nearby Pangyo Techno Valley so the entire area can be converted into a South Korean version of California's Silicon Valley.

The Ministry of Land, Infrastructure and Transport, in charge of the plan, said if all goes according to plan, parceling out of land and office space can begin in 2017 with construction of the new innovation cluster to be completed by late 2019.

It expects 1,500 high-tech companies to set up operations there, which can lead to the hiring of some 100,000 people and trigger 1.5 trillion won (US$1.35 billion) in fresh investments.

Companies that set up operations at the Creative Economy Valley can also receive some tax breaks, the ministry said.

yonngong@yna.co.kr
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