South Korean 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 ($133 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,” Moon told a meeting with business leaders held at Cheong Wa Dae – the presidential Blue House.
“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 – a Digital New Deal and a Green New Deal – along with projects on the sidelines to reinforce social safety nets, he said.
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.
Following up on the president’s blueprint, the chief fiscal policymaker unrolled detailed target figures and action plans.
Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki said: “The Korean New Deal is different from the US New Deal which was mostly represented by the Hoover Dam and other construction projects.”
“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 KOREA HERALD/ASIA NEWS NETWORK