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(EDITORIAL from Korea Times on June 3)

All News 07:01 June 03, 2020

Terms of success
'New Deal' program requires deregulation, innovation

The Moon Jae-in administration's economic stimulus program has taken concrete shape to strengthen digitization, eco-friendly growth and the social safety net. To that end, the government has decided to invest 76 trillion won ($61.9 billion) by 2025.

The program is a step in the right direction. It is aimed at reinvigorating the economy, creating jobs and protecting the socially weak in the face of the coronavirus pandemic and its devastating economic impact. That is why the package has been dubbed the Korean version of the New Deal.

At the core of the program is the pledged creation of 550,000 jobs over the next five years. On top of that, the liberal administration seeks to boost domestic consumption in a desperate bid to maintain growth momentum. It also plans to foster promising new industries, including biotech, system semiconductors and future cars.

It is noteworthy that the New Deal project is composed of a "Digital New Deal" and a "Green New Deal." This reflects the fact that massive physical infrastructure projects will no longer be a policy option to revive the economy in the 21st century. So the government has made the right decision to expand digital infrastructure by using artificial intelligence (AI), big data, 5G mobile networks and cloud computing services. By doing so, the country can actively embrace the Fourth Industrial Revolution and boost its competiveness.

The Green New Deal is pivotal to beefing up the eco-friendly infrastructure and ensuring low-carbon economic growth in order to mitigate global warming and cope with climate change. It requires the country to promote the renewable energy industry and raise energy self-sufficiency. Korea can emerge as a global leader in developing green technology.

But at stake is how to implement the program. Everyone knows that it is easier said than done. So the government should try not to be long on words and short on action. That is why the Moon administration should work out detailed action plans to translate its New Deal initiative into action without delay and in good faith.

First of all, it is necessary to inject massive fiscal means into the program swiftly. The government plans to promulgate its third supplementary budget bill this year worth at least 30 trillion won. It and the ruling party need to make efforts to garner support from opposition parties to pass the bill through the National Assembly. The Moon administration has already come up with a set of stimulus packages worth 250 trillion won, which accounts for 13 percent of the nation's GDP, to minimize the crippling economic fallout from COVID-19.

In this context, it is important to work out measures not to damage the country's fiscal soundness. Snowballing state debt and an excessive budget deficit could undermine sustainable economic growth in the medium to long term. For this, policymakers must make budgetary readjustments to reduce fiscal burdens and prevent waste of taxpayers' money.

More than anything else, the government should push for deregulation to allow new businesses such as telemedicine and autonomous vehicles to commence operation as soon as possible. What is also imperative is to encourage innovation.

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