President Lee Myungbak prescribes a strong role for government in addressing the liquidity and domestic consumption issues that are slowing the Korean economy. Present Lee dismissed claims of an economic crisis in Korea while presenting the 2009 budget to parliament on October 27. Korea's economy is heavily reliant on exports, and there have been concerns that the global economic slowdown would hurt some of Korea's most productive industries, as they depend on foreign buying power to thrive. The current economic malaise is different from the crisis of the late 1990's and requires new and innovative solutions. Lee described his approach by stating, ``We should actively cooperate with the international community, supply liquidity abundantly and invigorate domestic consumption. If the current crisis ends, the economic rank of each nation will change and the status of Korea will improve.'' Lee believes that the county's deep foreign exchange reserves make Korea largely resistant to economic downturns.

 

The president believes that the nation's holdings will allow it to manage the current situation. He says ``The current account and the capital account were in red from January to September due to surging oil prices and heavy foreign stock selling, but the foreign exchange holdings decreased just about 8 percent from US$260 billion to 240 billion,'' Korea must import much of its oil, and with the price of crude now falling, Lee is optimistic that the foreign exchange situation will improve. The accumulation of the current deficit can largely be attributed to the spike in the cost of importing oil. Lee says "Oil and raw material prices are showing a downward tendency. If such a situation continues next year, the international balance of payments will significantly improve.'' Lee promises that the government will intervene as needed in both the private and public sectors. He plans to expand the government's presence in the financial sector to offset the effects of the sluggish global economy. He seeks cooperation from all levels of government to boost domestic buying power and restore Korea's characteristically high rates of growth, "The government will drastically expand budget spending and prepare pre-emptive measures to revitalize domestic consumption in preparation for slowing export growth."