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(3rd LD) Moon touts New Deal fund, seeks financial sector's support

All News 15:47 September 03, 2020

(ATTN: UPDATES with post-meeting briefing in last 7 paras)
By Lee Chi-dong

SEOUL, Sept. 3 (Yonhap) -- President Moon Jae-in said Thursday the Korean-version New Deal project would open a new future of the nation's economy on the basis of the envisioned New Deal fund and finances.

He pledged "bold" regulatory reform to facilitate the implementation of the initiative, as he sought support from local financial firms for funding.

"Over the coming five years, 100 trillion won (US$84.3 billion) will be invested from policy financing in the Korean version of the New Deal and from companies, and 70 trillion won from private financing," he said during a Cheong Wa Dae meeting with the leaders of the country's major financial groups.

President Moon Jae-in holds the inaugural meeting on the Korean-version New Deal strategy at Cheong Wa Dae in Seoul on Sept. 3, 2020. (Yonhap)

It marked the inaugural session, chaired by Moon, to discuss detailed strategies on the so-called K-New Deal plan.

The government is poised to create a 20 trillion-won "New Deal fund" for ordinary people to invest in relevant infrastructure projects, he announced.

It would enable them to join the government's drive in person for "more stable profits" with shared loss risks and tax benefits, he added.

Separately, the authorities will soon develop and launch a "New Deal index" for a derivative.

He described budget spending, policy financing and private financing as three pillars for the success of the New Deal aimed at creating jobs, revitalizing the economy and preparing for the post-coronavirus era.

It would constitute the "biggest-scale investment" in a single project in the nation's history, according to Moon.

President Moon Jae-in (C) speaks at the first meeting on the Korean-version New Deal strategy at Cheong Wa Dae in Seoul on Sept. 3, 2020. (Yonhap)

The president emphasized the role of the financial sector for the ambitious program.

"Finance has played a big role whenever the country has faced a difficult time," he said. "The success of the Korean-version New Deal will be possible when private investment is activated and the people participate dynamically."

He assured the businesses that his administration will "push speedily for system improvements and regulatory reform, necessary for expediting the Korean-version New Deal."

Regulatory reform is, indeed, another prerequisite for the success of the initiative, he stressed, adding that the government will break regulations restricting the project and relevant corporate activities in a "bold" manner.

Among attendees were the chiefs of the country's 10 largest financial groups, including KB, Shinhan, Hana, Woori and Nonghyup, as well as the heads of several policy lenders.

Heads of South Korea's major financial firms attend the first strategic meeting on the Korean version of the New Deal, chaired by President Moon Jae-in, at Cheong Wa Dae in Seoul on Sept. 3, 2020. (Yonhap)

Also present were Lee Nak-yon, chief of the ruling Democratic Party, and its floor leader Kim Tae-nyeon, Finance Minister Hong Nam-ki, Financial Services Commission Chairman Eun Sung-soo and Financial Supervisory Service Gov. Yoon Seuk-heun.

Wrapping up the 98-minute session, Moon extended his gratitude to the financial community for interest in the New Deal fund and financing, Cheong Wa Dae spokesman Kang Min-seok said in a press briefing.

"Now that, the (ruling) party has also expressed its willingness for active support, (I) have more confidence that the Korean-version New Deal project will be successful," Moon was quoted as saying.

The project, he added, offers a chance for the country's financial industry to be upgraded. He also asked financial institutions to help the New Deal fund emerge as an "attractive investment alternative" to the real estate market for floating capital.

Moon earlier said the New Deal represents the government's efforts to turn South Korea's economy into a "pace-setting" and low-carbon one.

"Digital" and "green" are two keywords in the campaign, with AI government, SOC digitalization, green energy, and a smart green industrial complex also among the major projects.

Meanwhile, the number of on-site attendees was limited to around 30 in consideration of social distancing guidelines against COVID-19, with some other government officials and private financiers joining it remotely.


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