6th Meeting of Central Economic Response Headquarters
22nd Ministerial Meeting on the Economy
Government to Promote Job Creation in Private Sector
Deputy Prime Minister Hong Nam-ki presided over the 6th Meeting of the Central Economic Response Headquarters, that is the 22nd Ministerial Meeting on the Economy, held on June 11. Ways to promote private sector employment were main topics of discussion, as well as plans to help corporations wanting to sell off their assets and further develop the country’s COVID-19 response model. DPM Hong talked about the May employment data at the beginning of the meeting.
The following is a summary of DPM Hong’s keynote address.
May employment data
Jobs fell for a third consecutive month in May, declining at a slower rate, though, compared with the previous month from a loss of 476,000 to 392,000. As job losses slowed and the real economy began to improve helped by the easing of social distancing and government’s emergency reliefs, we will work for this trend to lead to long-term recovery with our focus on employment measures, such as job retention incentives and the over 550,000 job creation in the public sector.
I hope the Korean new deal and the 3rd extra budget spending, along with the reopening in major economies, will also help the economy take a path to recovery.
Promote employment in the private sector
The government understands that high-quality jobs are created by the private sector, and will continue to promote investment by the private sector. With regard to the issue, we will discuss the following.
- Promote the investment of the remaining 5.8 trillion won out of the 25 trillion won investment plan for the private sector, a part of the 100 trillion won investment project*
* 100 trillion won = 60.5 trillion won (public sector) +25 trillion won (private sector) +15.2 trillion won (private investment in public projects), the public sector share of 60.5 trillion won to be invested 100 percent this year
- Expand financial support for ventures and startups in “untact” and bio areas by over 2.1 trillion won to promote post COVID-19 growth engines
- Announce in July plans to allow nonfinancial holding companies to own corporate venture capital
- Improve labor and environment regulations, which will include the temporary easing of overtime rules and ameliorating chemical substance rules
- Ease regulations on market entry and other business regulations, such as those incurring compliance costs
- Launch in July the 150,000 private sector job creation program, a part of the government’s over 550,000 job creation package, for which the government will provide incentives and hold job fairs to promote job creation in the private sector
Topics of discussion
1) Promote employment in the private sector
2) Help companies wanting to sell off their assets
Apart from the over 175 trillion won worth of financial support package, the government will help companies wanting to sell off their assets. The program will be run as follows:
- Korea Asset Management Corporation (KAMCO) to operate an over two trillion won worth of corporate asset buying program
- KAMCO to provide guidelines for asset prices, and participate in the asset buying program, such as through buying and re-selling, sale and leaseback, and sale and reacquisition
- Promote private investors’ participating in the asset buying program: Run an information system to match buyers and sellers, and look for joint investment with private equity funds, corporate restructuring funds and the national pension fund
3) Expand fee reduction for using state properties
- Expand the fee cuts given to small businesses for using state properties to SMEs
- Provide payment deferrals for up to six months, as well as cut interest rates for late payment
4) Further develop the K COVID-19 response model
The government will further develop the country’s 3T COVID-19 response model to become a global standard for disease prevention and treatment.
- Further develop the ‘Test-Trace-Treat’ model
- ‘Test’ stage to cover diagnosis methods and how to run centers for infectious disease diagnosis
- ‘Trace’ stage to cover disease surveillance systems, including apps for self-diagnosis
- ‘Treat’ stage to cover a total of 18 areas, including nonhospital quarantine centers and medical resources management