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S. Korean Gov’t to Focus on Support for ‘Four Big Sectors’
Economic Policy Direction for 2019
S. Korean Gov’t to Focus on Support for ‘Four Big Sectors’
  • By Jung Suk-yee
  • December 18, 2018, 12:02
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The South Korean President Moon Jae-in (center) discussed with his cabinet members on the “2019 Economy Policy Direction” in Cheongwadae (Presidential Office) on Dec. 17.
The South Korean President Moon Jae-in (center) speaks during a meeting with his cabinet members on the “2019 Economy Policy Direction” in Cheongwadae (Presidential Office) on Dec. 17.

The South Korean government has presented 16 projects in four sectors to achieve results in the first half of next year.

The four sectors of the “2019 Economy Policy Direction” released by the government on December 17 includes “big project” for boosting domestic demand and creating jobs, “big deal” for settlement with social conversation and compromise, “big innovation” for industrial innovation and “big trust” for strengthening tolerance in the economy and society as a whole.

The government has decided to support the launch of large-scale corporate investment projects worth more than 6 trillion won (US$5.3 billion) for the big project first. It will execute over 6.4 trillion won (US$5.66 billion) worth of large private investment projects, such as Build-Transfer-Lease (BTL) and Build-Transfer-Operate (BTO), by reforming the system and inject 8.6 trillion won (US$7.6 billion) into community-based livelihood social overhead capital (SOC) projects. It is planning to allocate money for SOC projects before the fiscal year starts and push ahead with the projects early by raising the ratio of national subsidy.

The government has also pledged to address projects that are difficult to settle due to intricate webs of interests, such as home sharing and health and medical services, with the “big deal.” It will mainly focus on activating sharing economy, including home sharing, expanding health and medical services, developing and spreading mutual-growth regional job models and establishing innovative employment stabilization models.

The government will expand home sharing, including Airbnb, and come up with regulation reform measures for car sharing and space sharing by the end of the year. It will also carry forward the non-face-to-face monitoring pilot project for chronic disease patients, such as blood pressure disorders and diabetes, mainly in small hospitals in villages.

The government will pursue innovation in the industrial sector to strengthen the competitiveness in key industries. For the four key projects, it will draw up measures to boost the competitiveness in car, shipbuilding, display and petrochemical industries, establish strategies to promote promising service industries, including tourism, healthcare, content and logistics, reinforce the startup ecosystem of smaller and venture firms and support four key new industries, like smart factory.

The government will set up a manufacturing innovation strategy by the end of the year and fully support four key sectors – car, shipbuilding, display and petrochemical – first. It will expand supply support of electric and hydrogen powered cars and help with future car technology development projects in the auto industry. It will also provide 1.7 trillion won (US$1.5 billion) of financial support to smaller and equipment companies in the shipbuilding industry and help them win orders of 140 LNG propulsion ships by 2025.

The government is planning to strengthen tolerance by improving some policies in a bid to embrace working classes and small business owners. The big truest project includes the expansion of the income base of working classes and small business owners by expanding the earned income tax credit (EITC), reducing credit card fees and offering stronger projection of tenants and the reduction of their economic burdens as well as the system planning and enactment of relevant law to introduce the Korean version of unemployment allowance.

In addition, the government has suggested the revision of minimum wage and labor standard laws by the end of February to reform the minimum wage law and the extension of the duration of the flexible working hour system as part of the big trust projects.