Korean government announces “Korean New Deal 2.0”
The government announced the upgrade to the Korean New Deal, Korean New Deal 2.0 on July 14, a year after the initial plan was introduced. The Korean New Deal, through investment and better regulation, has accelerated distance working and education, fostered low-carbon and environmentally friendly manufacturing, and led the transformation to a green and digital economy. The national strategy has captured the attention of the global community as an appropriate policy to respond to the pandemic and climate change.
There have been many changes internally and externally since the strategy was introduced. At home, people are not yet out of the impact of the disease. Concerns raised included education affected; income gaps between households are widening, affecting the quality of childcare and the standard of living; concerns increase among young adults about jobs, income and housing; and labor demand is increasing in new industries, such as SW, as the transition to a digital and green economy accelerates, requiring systematic support for business restructuring, as well as for large-scale labor mobility that follows.
Externally, Korea faces the issue of carbon neutrality and the government will use this challenge to develop green growth engines.
Korean New Deal 2.0 hopes to expand the original Human New Deal employment and social security programs, bolstered by increased investment in human resource development, including programs to help bridge the gap. Apart from this, to upgrade the digital and green New Deal by adding new programs and expanding the original programs, increase the planned tax investments by 2025 from 160 trillion won to 220 trillion won, and bring a total of 600,000 additional jobs that are expected to be created, in addition to the 1.9 million jobs foreseen in the initial plan.
Digital and green New Deal
The government has upgraded the Digital New Deal to promote new businesses and accelerate the application of the project results so that Korean citizens feel the benefits as soon as possible.
With this, it aims to build an open metaverse platform and promote services based on the convergence of ICT, promote the development of core technologies, including cloud computing and blockchains, and work on the application. digital New Deal results so that every Korean can feel the benefits every day.
The government has also expanded the Green New Deal taking into account carbon neutrality by adding a new category of carbon neutrality, in which investments will be made in projects aimed at reaching the 2030 NDC3, such as the construction of a system of measuring emissions and creating a carbon emissions reduction program for industries, as well as extending the Green New Deal to cover various projects, in order to effectively support the transition to a low carbon economy.
Human and local New Deal
Human New Deal is an upgrade of the Korean New Deal employment and social security programs. The government has broadened the original plan to pursue inclusive growth through increased investments in human resources and supports to help close the gap.
He hopes to increase investments in human resource development in areas such as digital and green industries, SW and BIG35; help young adults cope with the impacts of the pandemic by providing enhanced support that will cover from education and employment to housing and asset building; improve education and childcare support for low-income households to close the gap and prepare them for a rapid transformation of the economy; adopt a comprehensive educational program with the primary emphasis on acquiring essential academic skills to help compensate for the learning loss caused by the pandemic; and also improve the country’s health care system, from child and elderly care to disability assistance and single parent support.
On the other hand, existing local New Deal projects will be accelerated with the enhanced initiative, and promising local projects will also receive support. This will then make it possible to find promising local authority projects and provide fiscal and administrative incentives to speed up their launches.
Regulatory reform and future projects
The government will improve regulations to support business restructuring and prepare for the resulting changes in labor demand. And to attract private sector investment, the government will continue to promote investment in Korean New Deal projects by the private sector. Following the Korean New Deal funds launched in March and sold within a week, a total of 100 billion won of funds will be made available in the market.
Going forward, the government plans to include more than 30 trillion won in New Deal 2.0 budgets in the 2022 budget proposal and to work towards passing Korea’s existing New Deal bills.
The government will also work on the early launch of Korea’s New Deal 2.0 projects and announce action plans for the Comprehensive Education Program and the Young Adult Support Program in July.
Finally, the Korean government wants to work out details to support business restructuring and labor market reform, which aim to promote the transition to a digital and carbon-neutral economy, and develop measures to encourage small businesses to create new ones. new businesses and try again after failure. .