Government to spend 64 trillion won on promoting service exports

The plan is to ramp up government support in service export financing to the scale equivalent to the support provided in manufacturing, according to the government.

Finance Minister Choo Kyung-ho speaks during a task force meeting on promoting service export held on Monday at the government complex in Seoul. [NEWS1]

The government will pour 64 trillion won ($49.2 billion) into promoting service exports over the next five years, in a bid to bring the longstanding deficit in service trade into the black.

The plan is to ramp up government support in service export financing to the scale equivalent to the support provided in manufacturing, according to the government.

The latest announcement was made on Monday during the first task force meeting aimed at promoting the service industry, jointly presided over by Finance Minister Choo Kyung-ho and Bahk Byong-won, chief of the Ahnmin Institute for Public Policy, who is leading the task force.

“The service sector has been expanding based on the domestic market, with its contribution to the economy growing from the previous 50 percent level to the 60 percent level,” said Choo.

“However, its share in the export sector has been stalled at around 15 percent for some 30 years.”

The minister promised to “shift the focus in the service sector, which is a high-value-added industry and has a significant impact on job creation, from the current domestic market to overseas.”

While Korea’s annual service exports increased by $10.3 billion on year to $130.2 billion last year, the balance was in the red, with a deficit of $5.5 billion.

The goal is to drive the figure to $200 billion by 2027 and $250 billion by 2030.

The government’s plan includes expanding its focus to service exports from manufacturing, which has been the primary focus of Korea’s export support program so far.

Export promotion agencies — such as the Korea Trade-Investment Promotion Agency and Korea SMEs and Startups Agency — will scale up support by 50 percent from the current amount by 2025.

Moreover, 64-trillion-won export finance support will be provided for the service sector until 2027, a record amount. Export finance support in services stood at 50 trillion won from 2018 to 2022.

The government also named content, tourism, healthcare, medical services, and digital services as key categories for service exports.

“We will recreate the strategies, tactics, policies and schemes that turned our manufacturing into one of the world’s strongest in promoting the service export,” said Bahk, who is spearheading the task force.

BY CHO HYUN-SUK, SHIN HA-NEE [shin.hanee@joongang.co.kr]