26th Meeting of Central Economic Response Headquarters
9th Ministerial Meeting on the Korean New Deal
Government to Work for Jobs to Rebound
Deputy Prime Minister Hong Nam-ki presided over the 26th Meeting of the Central Economic Response Headquarters, which is also the 9th Ministerial Meeting on the Korean New Deal, held on January 13, 2021, and discussed plans to help employment recover in the first quarter. New venture financing and export financing for the Korean New Deal products and services were other topics of discussion. DPM Hong mentioned the current COVID-19 situation at the beginning of the meeting.
The following is a summary of Deputy Prime Minister Hong’s keynote address.
Current COVID-19 situation
- New infections fell to less than 600 cases daily
- Emergency relief began to be delivered on January 11, and as for the small business relief, 76 percent of those eligible, 2.09 million, had received the support as of January 12
December employment data and plans to help jobs rebound
Jobs fell 628,000 year-on-year in December 2020 amid the resurgent virus and partly due to a high base effect from December 2019. Throughout 2020, jobs fell 218,000. It seems that job markets continue to be weak until February, young adults and women having hard time getting one. To help the job market, the government will do the following.
- Provide in the first quarter with 80 percent of jobs scheduled to be created directly by the government over 2021and 44 percent of social service jobs
- Public institutions to recruit over 45 percent of the 2021 hiring in the first half and provide 22,000 internships
- Spend 38 percent (5.1 trillion won) of the 2021 job project budgets in the first quarter, including the employment retention support
- Provide a job seeker-specific support for vulnerable groups in the labor market, such as young adults and women, as well as announce in the first quarter measures to promote the employment of young adults and women
- Promote private-sector hiring: Work on deregulation to promote hiring in ventures, new industries and BIG3
Promote ventures
Ventures creating over five times as many jobs as the country’s four largest conglomerates do in total[1], the government has decided to expand its support for ventures by offering financial support to those without technologies to work as collateral. A total of 3 trillion won worth of financing will be provided by 2022.
Venture financing without technologies to work as collateral
- Work to introduce the Silicon Valley Bank financing, a security-based lending: Revise the Venture Capital Act to introduce a security-based low-interest rate loans and to allow the issuance of convertible bonds
- Introduce an R&D project-based financing program and increase R&D support to 54.5 billion won in 2021, an increase from 30.8 billion won last year
- Reform the venture investment program of Korea Technology Finance Corporation so that ventures outside the Seoul metropolitan area can benefit from it: Funds of up to 500 billion won to be raised for the purpose
Promote the export of Korean New Deal products and services
1) Promote Green New Deal exports: Work to increase overseas orders for green energy generation from 15GW in 2019 to 30GW in 2025
- Provide export financing worth 30 trillion won by 2025
- Develop an export credit insurance scheme to promote Green New Deal exports
- Streamline the feasibility study required for overseas projects
- Work on promising markets to provide on-site solutions from financing to bidding
2) Promote Digital New Deal exports: Work for the exports of ICT products and services to expand to US $250 billion in 2025, an increase from US $180 billion in 2019
- Raise US $200 billion worth of venter exporter funds and US $30 billion worth of Digital New Deal exporter funds in 2021
- Expand the all-round ICT exporter support to 1,000 companies, an increase from 400 this year
