Government seeks to turn pandemic crisis into opportunity

29-May-2020 Intellasia | KoreaTimes | 6:02 AM Print This Post

DPM vows to strengthen ‘crisis governance, pandemic resilience’

The government will spearhead a comprehensive plan to turn the COVID-19 pandemic into an opportunity, amid what it calls a “critical milestone” to help the country emerge from the crisis and move toward becoming a more advanced economy, the country’s top policy maker said Thursday.

The competitive edge of a country in the post-corona virus world will hinge on its ability to maximise pandemic resilience, a reason why the government will mobilise its utmost efforts to strengthen its crisis management structure for public health and safety.

“The future of the Korean economy will be determined by a series of measures undertaken following the pandemic amid an economic paradigm shift, accelerated digitisation, and reorganisation of the global economic structure. The government has concrete plans to identify strategies to best embrace the next normal brought on by the virus,” deputy prime minister and Finance minister Hong Nam-ki said in a speech read at The Korea Times Forum held Thursday. Second vice minister of Economy and Finance An Il-whan delivered the speech on behalf of Hong, who had to preside over a top-level emergency meeting of ministers held every Thursday morning to deal with the pandemic.

Korea will be able to elevate its standing with its global peers amid the “effective and efficient” response and containment measures that helped the nation bring the pandemic under control, a feat recognised around the world.

“The international community has been asking for Korea’s help in tackling the pandemic, with many international organisations including development banks and financial agencies seeking cooperation with us to monitor, test and treat the infected. Our experience and successful management of the crisis will be shared with other countries, leading to new global business projects such as setting up research centers and international organisations here,” he said.

The plan is part of a four-pronged strategy that includes structural reform, the building of an infrastructure for sustainable growth, the strengthening of social safety nets and reducing the country’s dependence on the current global value chain.

The government will help firms to streamline their corporate structure to better adapt to the fast-changing business environment.

Private sector vibrancy will be bolstered via government initiative to nurture the manufacturing of semiconductors needed for digitisation, and the biotech and health industries, as well as “future auto industries,” notably electric and hydrogen vehicle production.

Unnecessary regulations will be lifted to help firms develop business models and reduce costs, the crucial steps to bolster corporate efficiency which in turn will lead to future economic growth.

Digitisation accelerated by Korea’s much-touted advanced information technology and smart learning will be next growth engines, creating high-quality jobs at home while solidifying the country’s standing on the global stage, An added.

The second vice finance minister also noted that growth initiatives will be environmentally friendly as part of a “green drive” amid climate change and the faster-than-feared deterioration of the environment around the world.

“Under the dual initiative of digitisation and a green economy, the government will invest to promptly put an end to the crisis and create jobs. Institutional frameworks will be set up and strengthened to improve resilience,” he said.

The government will seek to use the crisis as an opportunity to promote the “Korea premium,” a new paradigm that it hopes will replace the “Korea discount,” a term long used to describe the under-valuation of Korean companies’ stock prices compared to their global counterparts due to factors such as opacity in corporate governance, labour inflexibility and regulatory hurdles.

Measures will be outlined to reduce dependence on the current global value chain, as the pandemic laid bare how a country’s major economic activities can essentially ground to a halt due to a closely linked manufacturing system.

More priority will be put on reshoring to encourage Korean businesses with overseas manufacturing facilities to move production back to Korea.

High-tech firms manufacturing materials, parts and equipment will be given incentives to set up an industrial complex here, a step the government hopes will also attract foreign businesses to operate in a country long shunned for its labour market rigidity, unfavourable living conditions and most of all the inconsistent implementation and arbitrary interpretation of related laws.

“Economic policies and foreign policies will be set up to better navigate difficulties brought on by global value chain disruption. Lessons learned through hardship will turn into an opportunity to foster innovation,” he said.


Category: Korea

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