The government plans to inject about 110 trillion won ($97 billion) into export-oriented sectors in cooperation with conglomerates in a joint bid to boost the economy by revitalizing the troubled exports sector.
The state-led support scheme was unveiled during the Ministry of Trade, Industry and Energy’s policy briefing on how to bolster exporters’ competitiveness to President Park Geun-hye at Cheong Wa Dae on Thursday.
While the funding plan reflected the undermined corporate sentiment in the wake of the Middle East respiratory syndrome outbreak and the Greek woes, the private sector ― which is composed of major enterprises ― will be greatly in charge of the funding in particular, said ministry officials.
According to the officials, the government will induce the corporate sector to preemptive facilities investments totaling 91 trillion won between the second half of the year and in early 2016.
The government and the private sector also jointly plan to pour 6.8 trillion won into the research and development activities as part of their effort to foster high-end export items with growth potential.
In addition, state-controlled agencies will issue trade-focused loans worth 16.2 trillion won to small and mid-sized enterprises.
Collectively, the state and private funding to export-focused industries is estimated to hover around 110 trillion won by the first half of 2016.
“The detailed segments for the intensive R&D investment will include organic light-emitting diodes (OLED) and mobile CPUs,” said a ministry official.
The government also designated a group of export items with high growth potential. Among them were next-generation lithium batteries, eco-friendly vessels and “super-engineering” plastic, he said.
Park said it was necessary for the government to mobilize every possible measure to arrange the favorable environments for active corporate investment, citing the recent supplementary budget set by the Finance Ministry as an example.
“It is impossible to attain the economic vitalization without a recovery in exports. The current crisis is a matter of life or death to enterprises,” she told the policy meeting participants including MOTIE senior officials and the heads of five major business lobby groups.
Aside from raising export competitiveness, Park stressed that the country should become stronger in three other sectors ― tourism, venture start-up investments and construction investments for balanced growth between the domestic demand and exports.
Meanwhile, chief executives of the nation’s 30 major business conglomerates vowed to take the initiative in overcoming the current economic slump during their meeting Thursday at the Federation of Korean Industries in Yeouido, Seoul.
In a statement, they called the current situation “serious,” under which the GDP growth could stay below 3 percent. They highlighted lackluster performance in exports, which fell for the sixth consecutive month.
They also cited the MERS outbreak, the Japanese yen’s weakness against the Korean won, the Chinese economic slowdown and the Greek default for factors dealing a blow to the overall economy.
The corporate chiefs asked the National Assembly to pass the state’s extra budget plan totaling 11.8 trillion won as soon as possible.
