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(LEAD) Moon: Korean New Deal designed for 'pacesetting' economy

All News 16:18 June 01, 2020

(ATTN: MODIFIES 7th para; UPDATES with remarks on China-U.S. rift, other details in last 9 paras; ADDS byline)
By Lee Chi-dong

SEOUL, June 1 (Yonhap) -- President Moon Jae-in announced plans Monday for a string of big-spending government projects, including the Korean version of the New Deal, to ride out the economic crisis from COVID-19, presenting South Korea's "pacesetting" economic vision.

Moon confirmed the government's push for the biggest-scale supplementary budget in the country's history, as he presided over the sixth emergency economic council meeting at Cheong Wa Dae.

The session was meant to set the economic policy direction for the latter half of this year.

"The Korean version of the New Deal is a new national development strategy to leap from a follower country to a pacesetting nation," the president said.

The government will create a new opportunity for the future of South Korea with the massive creation of jobs by transforming the follower-style economy into a pacesetting one, he added.

President Moon Jae-in (2nd from L) speaks at the sixth emergency economic council meeting at Cheong Wa Dae in Seoul on June 1, 2020. (Yonhap)

President Moon Jae-in (2nd from L) speaks at the sixth emergency economic council meeting at Cheong Wa Dae in Seoul on June 1, 2020. (Yonhap)

He said the Korean version of the New Deal is based on two pillars -- the Digital New Deal and Green New Deal.

Moon also said the government will mobilize "all fiscal capabilities" to advance the recovery of the nation's economy hit by the coronavirus pandemic.

At the center of the campaign is a plan to allocate the third batch of extra budget amid the economic crisis.

"In order to continue bold budget spending in the latter half (of 2020), the government has drawn up a plan for a third supplementary budget on the largest scale as a single supplementary budget," Moon said, though he stopped short of providing an exact figure.

The government is expected to submit a related bill, reportedly worth around 30 trillion won (US$24 billion), to the National Assembly later this week.

The president requested bipartisan support for the speedy passage of the bill.

The Korean New Deal program will be included in the extra budget spending plan, according to Moon.

"It's just the beginning," he added. "The government will explore new projects and significantly expand the size of investment."

He said a longer-term comprehensive plan will be made public in July.

Meanwhile, Moon cited two important tasks for the July-December period for South Korea: pulling off a rebound in economic growth and laying the groundwork for a pacesetting economy to stay ahead in the post-coronavirus era.

Amid the prolonged pandemic, the world's economy is in deepening trouble, and it is hard to predict when it will bottom out, Moon pointed out.

South Korea is also confronted with the worsening of employment conditions and falling exports.

Moon especially expressed concern about a conflict involving global powers, saying it weighs heavily on South Korea's export-reliant economy.

He was apparently referring to the deepening rift between China and the United States.

Seoul has often walked a tightrope between Washington and Beijing, dubbed the G-2.

South Korea's exports to China accounted for 25.1 percent of its total exports, and those to the U.S. made up 13.5 percent last year. The nation is under thinly veiled pressure to join the U.S.-led Economic Prosperity Network, apparently aimed at sidelining China from global supply chains.

In addition, the two are key parties concerned with the Korea peace process.

President Donald Trump told media that he would like to invite south Korea to a G-7 session to be held around the U.N. General Assembly in September, along with Australia and India. Moon's office has not issued a formal response yet to relevant news reports.


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