The government has now set out its plans to strengthen exports and to stabilize domestic consumption. It will also work on stabilizing the housing market and on solving the high rate of household debt.

The seven government ministries that oversee various sectors of the economy announced their plans to bolster the economy during a policy briefing on Jan. 14. These organizations include the Ministry of Strategy and Finance, the Ministry of Trade, Industry and Energy and the Ministry of Land, Infrastructure and Transport.

To begin, the government will expand its budget by an additional KRW 8 trillion this year. Within the budget, there will be an additional KRW 10 trillion ear marked for alternative investments at the national pension fund and KRW 6 trillion set aside for investments in public organizations.

The government will introduce “regulation free zones” in order to foster selected strategic industries in regions across the country. It aims to promptly pass legislation covering the basic law for the development of service industries within the first half of this year. It plans to set up development strategies for those service industries, too, by reviewing current regulations and support systems.

In order to promote equipment investment at small- and medium-sized enterprises (SME), the government will expand the length of time over which equipment investments can be depreciated, from the end of 2015 to June 2016. It will also increase the amount of accelerated depreciation, to 50 percent of the original cost from the current 25 percent. The early accelerated depreciation system is an early repayment system designed to help firms depreciate as much money as possible in the early stages so that they can quickly move on and make other investments.

The government's policy briefing session is held in Sejong City on Jan. 14.

The government’s policy briefing session is held in Sejong City on Jan. 14.

Moreover, by next year, the government will allocate 4,000 hectares to so-called “smart farms” where high tech is applied to agriculture in order to modernize the entire farming process. This equals about 40 percent of the current number of modernized green houses found across the nation. It will also support agricultural exports to China, backed by the Korea-China free trade agreement (FTA). Export items here include specifically kimchi and rice. The government will also increase the number of local farmers’ markets around the country to 140, from the current 103, and set up special sales hours for agricultural products on the publicly-owned home shopping channel. The government also plans to further develop customized seafood products, such as edible salted laver, or gim, and fish cake, or eomuk. It will actively work to strengthen marketing by opening a promotional booth for Korean seafood, the “K-Fish Brand Hall,” in order to support seafood exports.

The Ministry of Trade, Industry and Energy announced new measures to facilitate exports. It will nurture some selected promising consumer good factories, as it considers them to be new engines for export growth, and support these select firms through a fund worth some KRW 4.8 billion this year, all aimed at consumer goods and services. The selected promising consumer goods include skincare products and cosmetics, fashion and clothing items, “living goods” such as basic home supplies, baby and infant products, agriculture and seafood, and pharmaceutical goods. The government also hopes to see an increase in the proportion of consumer goods in the country’s total exports, hoping that it hits 6 percent by 2016 and 6.5 percent by 2017, over last year’s 5.3 percent.

During the policy briefing on Jan. 14, President Park Geun-hye (center) urges government ministries to do their best so that the economy can realize its full potential.

During the policy briefing on Jan. 14, President Park Geun-hye (center) urges government ministries to do their best so that the economy can realize its full potential.

The government has received much attention from media outlets for its plans to strengthen the stability of the housing supply and to solve problems surrounding household debt. Based on the existing system of reverse mortgages, the Financial Services Commission presented new, customized measures that will target people with different income levels and ages.

Under the proposed new measures, a head of household aged over 60 can sign up for a reverse mortgage, even if the property currently has a mortgage.

As for stabilizing the housing supply, the Ministry of Land, Infrastructure and Transport decided to increase the number of residents that quality for “New Stay” status, a new type of long-term apartment rental program, and secure more land for the construction of new apartment complexes. It hopes to increase the number of residents to 12,000 this year from that of last year’s 6,000. Also by next year, the ministry hopes that there will be 80,000 more “New Stay” apartments.

Finally, during the briefing, President Park Geun-hye asked for the ministries to do their best in order to bolster the economy.

“I hope we can successfully accomplish our four reforms and our Three-year Economic Innovation Plan so that we can return the benefits to the citizens and build a firm foundation for future growth over the next 30 years,” she said.

By Yoon Sojung
Korea.net Staff Writer
Photos: Cheong Wa Dae
arete@korea.kr