Seoul trots out all-around support actions to revive trade and industrial competitiveness

[Photo by Lee Seung-hwan]

South Korea will supply 50 trillion won ($36 billion) in emergency liquidity funds for small and mid-sized enterprises, set a 500 billion won fund to revive the tourism industry, and back the supply chain in mobility, AI and system chips to fight the headwinds damaging the country¡¯s pillar exports and industrial competitiveness.

In an emergency cabinet meeting unprecedentedly televised live at the chair of President Yoon Suk-yeol for 80 minutes on Thursday, government offices trotted out a range of support and incentive actions to mend the trade and current-account balance wrecked by falling Korean won against the U.S. dollar to mire the economy¡¯s growth in the zero territory.

Under the measures vowed by various economy-related offices, Seoul targets to groom 1,000 promising startups over the next five years and give tax credits to companies that indirectly invest in venture firms through private-sector funds to boost private sector-led venture growth. The government also plans to create a 500 billion won fund to revive the tourism industry devastated by years-long pandemic.

Finance Minister Choo Kyung-ho said the government will take extensive measures to reinforce tax support to help private funds flow more toward venture companies.

Financial Services Commission (FSC) Chairman Kim Joo-hyun said the commission is currently working on a 50 trillion won program to support struggling SMEs facing liquidity crunches.

The government plans to invest 2 trillion over the next five years in 10 selected areas including mobility, biotechnology, artificial intelligence, and system semiconductors, said SMEs and Startups Minister Lee Young, emphasizing that the government will discover and nurture more than 1,000 promising start-ups together with the private sector.

The government will raise a 500 billion won fund to support tourism companies, create a 'K-culture' training visa, ease restrictions on foreign employment quota, and train 10,000 content specialists over the next three years, according to Culture, Sports and Tourism Minister Park Bo Gyoon.

The meeting also discussed policy directions for the country¡¯s key industries such as semiconductors and secondary batteries. Although the semiconductor industry is in a downtrend, it remains an export pillar for Korea, said Trade, Industry and Energy Minister Lee Chang-yang. The government is working to provide more than 1 trillion won in financial support to the semiconductor sector.

The secondary battery industry is the most likely to benefit from the U.S. Inflation Reduction Act (IRA) and needs to be fostered as Korea¡¯s next semiconductor, said the minister, noting Korean battery companies have so far won orders worth 560 trillion won.

Regarding the nuclear power industry, the minister said the government will restore the overall competitiveness of the nuclear power plant industry by helping bring more work and opportunities through customized package offers for customer countries.

Land Minister Won Hee-ryong said the government is aiming to become one of the world's four major construction powerhouses by helping Korean companies win orders worth $50 billion per year in the overseas construction market.

[¨Ï Maeil Business Newspaper & mk.co.kr, All rights reserved]