South Korean President Moon Jae-in on Wednesday announced a stimulus package of $191 billion focusing on digital technology and green energy projects that he dubbed the “Korean New Deal 2.0.”
The program is an expanded version of the $139 billion initiative launched one year ago as a response to the coronavirus disease 2019 (Covid-19) pandemic.
“The Korean version of the New Deal is a project that started in the midst of a crisis,” Moon said in a televised address on Wednesday. “Moving beyond simply overcoming the challenges at hand, it has evolved as a national development strategy and has given us hope to take a leap forward into becoming a global pacesetter.”
The original project included a Digital New Deal, which looked to leverage South Korea’s robust technology infrastructure to take a leading role in industries such as 5G, artificial intelligence and big data.
Meanwhile, the program’s Green New Deal looked to move South Korea away from its dependency on fossil fuel with investments in renewable energy, eco-friendly buildings, electric vehicles and telemedicine.
The new plan looks to expand digital investments into connected virtual platforms known as the metaverse, as well as further promote technologies such as blockchain and cloud computing.
The revised New Deal 2.0 will also expand on green energy investment, including a new category targeted at reaching South Korea’s carbon neutrality goals through efforts such as an increase in hydrogen vehicle use and expanded emissions monitoring.
A total of 2.5 million jobs are expected to be created by 2025 under the policy initiatives, South Korea’s Ministry of Finance and Economy said in a statement released Wednesday, representing an increase of 600,000 jobs over the target of the original program.
A new element introduced Wednesday was the Human New Deal, a $44 billion investment in promoting inclusive growth and strengthening the social safety net through efforts such as job training, education and childcare support.
South Korea’s economy as a whole has weathered the Covid-19 pandemic well, with the government projecting GDP growth to exceed 4 percent in 2021 on the back of strong exports, but smaller businesses have been suffering.
Nearly eight in 10 owners of small storefront businesses have seen their revenues drop this year, by an average of 21.8 percent, according to a survey released on Monday by the Korea Economic Research Institute.
Widening income inequality, skyrocketing real estate prices and a tightening job market have also left younger South Koreans uncertain about the future, the finance ministry said.
“With the Human New Deal, we aim to give hope to people in their 20s and 30s and secure the country’s social and labor safety net,” Deputy Finance Minister Han Hoon said at a press briefing to announce the new plans.
President Moon, whose single five-year term ends next year, touted the Korean New Deal 2.0 initiative as a long-term roadmap for South Korea.
“We have turned the Covid-19 crisis into an opportunity and showcased our potential,” he said. “The Korean New Deal will be our strongest policy tool. It is our hope for overcoming Covid-19 and it is a future strategy for South Korea, going beyond my own administration.”