President Moon Jae-in on Tuesday unveiled the road map of a “Korean New Deal” stimulus package that seeks to invest over 160 trillion won ($132.67 billion) and create 1.9 million jobs over the next five years.
Asia’s fourth-largest economy came up with the extensive midterm fiscal package to recover from the persisting COVID-19 fallout, as well as prolonged slow growth across the globe.
“The Korean New Deal is our new centennial blueprint, as well as a paradigm shift to leap forward into a pace-setting economic model,” said Moon in a meeting with business leaders held at Cheong Wa Dae.
“With the post-coronavirus era pressing upon us, we may no longer delay these historic changes such as climate change responsive actions and paradigm shift into an inclusive society.”
The New Deal package primarily consists of two pillars -- Digital New Deal and Green New Deal -- along with projects on the sidelines to reinforce social safety nets, according to Moon.
The latest move came nearly three months after he suggested the Korean New Deal policy frame to create jobs and boost economic growth amid the epidemic fallout.
The meeting was attended by Deputy Prime Minister and Finance Minister Hong Nam-ki, the ruling Democratic Party of Korea’s chief policymaker Rep. Cho Jeong-sik, and corporate leaders including Korea Chamber of Commerce and Industry Chairman Park Yong-maan.
Representing the labor circles was Kim Dong-myeong, head of the Federation of Korean Trade Unions. Kim Myeong-hwan, leader of the hardline Korean Confederation of Trade Unions, did not attend due to the ongoing standoff with the government over the disputed minimum wage increase rate.
Hyundai Motor Group Executive Vice Chairman Chung Euisun and Naver CEO Han Seong-sook also participated via teleconferencing, addressing the Green New Deal and Digital New Deal, respectively.
Following up on the president’s blueprint, the chief fiscal policymaker unrolled detailed target figures and action plans.
“The Korean New Deal is different from the US New Deal which was mostly represented by the Hoover Dam and other construction projects,” Hong said.
“Instead, we shall focus on building a ‘data dam’ to establish an eco-friendly, digital-driven infrastructure and prepare the ground for sustainable growth after COVID-19.”
The government’s idea is to inject some 160 trillion won until 2025, allocating 58.2 trillion won for digital new deal projects and 73.4 trillion won for green new deal ones. The affiliated social safety enhancement sector will also account for 28.4 trillion won.
Of the total 160 trillion won budget, government expenditure will account for 114.1 trillion won, while the remaining amount will be procured from local governments and the private sector, Hong explained.
As a result of the fiscal injection, the government expects to create 1.9 million new jobs during the given period.
The finance minister will assist President Moon in the presidential New Deal strategy headquarters and also serve as co-chief in the government-ruling party task force. A working-level support group will be installed within the Ministry of Economy and Finance, under the lead of Vice Finance Minister Kim Yong-beom, according to officials.
“The Korean New Deal is not a government project. It is all about national unity. This is why (Tuesday’s) meeting will involve figures from every part of the society, ranging from labor unions, management, civic groups, political parties, and government,” said Yoon Jae-kwan, deputy spokesperson of the Blue House in a press briefing.
By Bae Hyun-jung (email@example.com