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Korean Version of the New Deal to Boost Economy Announced in Early June
President Moon After his Special Address Marking the Third Anniversary of his Inauguration (donga.com)

About the Korean Version of the New Deal

On May 4th, Hong Namgi, a minister of the Office for Government Policy Coordination, stated that a Korean version of the New Deal would be announced in early June. Also, President Moon Jae-in illustrated how the government would introduce it in his special address to mark the third anniversary of his inauguration on May 10th. The New Deal was a policy whereby the American government under Franklin D. Roosevelt, the 32nd president of the United States, actively interfered in economic activities, revitalized the economy, and created jobs, especially focusing on Social Overhead Capital (SOC) to deal with the Great Depression in the late 1920s. The Korean New Deal is also aiming to create jobs and invigorate the economy primarily through the government, compensating for the insufficient creation of new jobs in a non-public economy and helping people get new jobs. The government will build a stabilization fund of 40 trillion won to cope with a crisis of basic industries and create half a million jobs. It will also support companies with low credit rates, freelancers, and small business owners, specially hired workers (workers like delivery men, insurance planners, and truck drivers whose rights as workers are not guaranteed in law) who fall under a blind spot of employment support.

Three Industries in the Korean New Deal

The Korean New Deal is expected to focus on three industries, and each of the three is composed of 10 main tasks. First, the government emphasizes the Digital New Deal. Data, network, and artificial intelligence (AI), so-called DNA, are the main issues in the Digital New Deal. It is about strengthening a previous policy regarding information and communications technology (ICT), which is in regard to broadening industries related to data, 5G, and AI. The second industry is the Digital SOC industry, which is concerned with applying digital methods in transportation and construction. Under the Digital SOC industry, tasks include building a system of digital distributions, increasing stability by introducing a smart managing system in aging facilities, and expanding the collecting, processing, and sharing of data related to national infrastructure. Lastly, the promotion of untact (a coined term which combines the prefix un- and the word contact, meaning non-face-to-face) business is included in the Korean version of the New Deal. Untact business includes EduTech, an untact education service technology, and mobile healthcare. The government will build a foundation to expand untact businesses and reinforce cloud systems and cyber safety nets.

Ways to Improve the Korean New Deal

Overall, the Korean version of the New Deal has good intentions but needs to compensate for its weak points. Revising it to have definite production and employment effects and deciding on a proper amount of financial commitment and sources of that commitment are needed.

이소윤  allybypen@skku.edu

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