Moon stresses finance in Korean New Deal

President Moon Jae-in speaks at a meeting with finance industry leaders about the Korean New Deal on Thursday. Yonhap
President Moon Jae-in on Thursday announced that the government will roll out financial policies to support the Korean New Deal program, including a 20 trillion won ($16.8 billion) “New Deal Fund.”

Speaking at the first Korean New Deal strategy meeting with financial industry leaders, Moon said that the Korean New Deal is critical to overcoming the economic crisis brought about by the COVID-19 pandemic, and in deciding the economic future of the country.

The Korean New Deal is a government-led program that seeks to strengthen the country’s information technology and environment-related industries, as well as social infrastructure, and create 1.9 million jobs by 2025.

“The Korean New Deal will open the future of Korea’s economy through the New Deal Fund and New Deal Finance,” Moon said, adding that the Korean New Deal will see the largest investment in Korean history.

Moon said that a 20 trillion-won “New Deal Fund” will be established, and that 170 trillion won – 100 trillion won from state-run organizations and 70 trillion won from the private sector – will be injected into Korean New Deal projects and concerned companies over the next five years.

Moon also touched on regulatory reform, saying that reforming regulations is vital to the success of the Korean New Deal project.

“The government will carry out the regulatory innovation and improving of the system that is required for the Korean New Deal,” Moon said.

“Legislations required for the Korean New Deal will be carried out without delay, and regulations that hamper corporate activities and New Deal projects will be abolished boldly.”

Under plans for the New Deal Fund, the public sector will raise 7 trillion won between 2021 and 2025, and private sector financial institutions will match the investment. The fund will also be open to retail investors.

According to Cheong Wa Dae, state-run financial institutions including the Korea Development Bank, Industrial Bank of Korea and Korea Credit Guarantee Fund will inject 100 trillion won into related areas through loans and guarantees.

In addition, the five largest financial holdings firms – Shinhan, KB, NH, Hana and Woori – will inject 70 trillion won through loans and investments, Cheong Wa Dae said.

At the meeting, Korea Exchange also revealed plans to develop indexes: the “K-new deal index” in September and “carbon-efficiency green new deal index.”

The K-new deal index will consist of companies in the fields of batteries, biotech, internet and games, and the carbon-efficiency green index will be designed to direct investments to companies with lower carbon emissions, Cheong Wa Dae said.

By Choi He-suk (cheesuk@heraldcorp.com)

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