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2019 ECONOMIC POLICIES
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18th Ministerial Meeting on Boosting the Economy

  • DivisionPolicy Coordination Bureau - General Policy Coordination Division
  • DateJune 26, 2019
  • Tel044-215-4510

18th Ministerial Meeting on Boosting the Economy

17th Ministerial Meeting on the Economy of 2019

 

Government Unveils Policy Framework to Develop Services

 

 

Deputy Prime Minister Hong Nam-ki presided over the 18th Ministerial Meeting on Boosting the Economy, that is, the 17th Ministerial Meeting on the Economy of this year, held on June 26.  Policy framework to develop high value-added services was main topics of discussion, along with the plans to improve the logistics industry.  DPM Hong talked about increasing global economic uncertainties at the beginning of the meeting, saying that the Korean government has put its first priority on boosting the economy amid the global uncertainties and the 2019 economic policies for the second half, scheduled to be announced on July 3, have been drawn up to support this priority, reflecting the assessment of the first half.

 

The following is a summary of DPM Hong’s keynote address.

 

Policy framework to develop high value-added services

 

Services create higher added-value than other industries, adding almost two folds of jobs to the economy compared with manufacturing.  However the country’s service sector has yet to reach the level of advanced economies whose service sector produce higher added-value and more jobs than the Korean economy by 10 to 20 percentage points to total GDP.  Against this backdrop, the government has drawn up its policy framework which focuses on the following:

 

1. Provide the equal level of support to what has given to manufacturing

 

- Expand the fiscal, tax and financial support available only to manufacturing and some services to all services

- Spend around 70 trillion won over the next five years (2019 – 2023) to support promising services

 

* Investment plan for the next five years (trillion won): 12.8 (2019), 13.4 (2020), 14.0 (2021), 14.6 (2022), 15.2 (2023)

 

2. Invest in basic infrastructure

 

- Build up a national statistics system to help develop high value-added services, which will cover from productivity, to employment and to R&D

- Work on service standardization:  Details will be announced in the first half of 2020, such as kinds of services to be standardized and what standards should apply to services made possible by industrial convergence

- Invest around 6 trillion won over the next five years (2020 – 2024) in public service R&D, and expand tax incentives for service R&D

 

3. Promote industrial convergence between manufacturing and service

 

- Help develop the manufacturing service industry, which specializes in manufacturing a model product according to the designs provided by clients

- Promote the R&D service industry, which does researches commissioned by clients

- Work on the Smart Service Project to provide service SMEs with ICT solutions designed to their needs, such as service process management systems and logistics management systems

 

4. Build a regulatory foundation

 

- Work on the passage of the Framework Act on Services Development

- Form a Services Development Committee to work on a five-year plan

- Work to grow professionals specializing in developing service products, and set up service research centers

 

5. Relax regulations on promising services

 

In addition to the framework to develop high value-added services, we reviewed the measures announced in the 2019 economic policies to promote services, and decided to relax the following regulations.

 

- (Healthcare and tourism) Promote medical tourism by allowing foreign language advertisements in 32 tourist zones, an expansion from airports, ports and duty-free shops

- (Tourism) Raise the on-the-spot tax refund ceiling for tax-free shops from 1 million won per person to 2 million won

- (Tourism) Work on forest tourism, as well as work for large-scale tourism projects to set off as soon as possible, including the construction of an amusement park near the Seoul metropolitan area

- (Contents) Relax the Shutdown Law and remove the spending cap of 500,000 won a month on online games

 

Plans to improve the logistics industry

 

The government will work to develop the country’s logistics industry into a major growth engine that can lead the 4th industrial revolution.

 

- Found a legal basis for delivery services and employee protection

- Build logistics facilities in the Seoul metropolitan area, and invest around 200 billion won in logistics service R&D by 2027

- Work on improving the current outsourcing system, including subcontracting

 

Please refer to the attached pdf

 

 

 

Ministry of Economy and Finance
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