South Korea Officially Unveils ‘Korean New Deal’

President delivers address to the nation . . .

South Korea’s president Moon Jae-in officially unveiled the ‘Korean New Deal’ during an address to the nation on July 14. The Korean New Deal, initially announced in late April, is a stimulus package with significant investment in digital and green sectors, and is designed to create jobs and aid South Korea’s post-COVID recovery until 2025. During yesterday’s unveiling, Moon announced the addition of the social and employment safety net as a third pillar of the policy, increasing the total investment from the initial C$85.4 billion to C$180 billion. With the social safety net addition, the projected number of jobs created has risen from 550,000 to 1.9 million.

Immediate effects . . .

The Korean New Deal brings together Moon’s existing policies on digitalization, decarbonisation, and social and employment safety reforms, with significant funding to accelerate policy delivery. Some of the projects include the ‘Data Dam’ project, which will release 140,000 new datasets and provide subsidies for 8,400 firms to integrate artificial intelligence into their operations; the digitalization and greening of public infrastructure such as roads and schools; and the expansion of employment insurance to contract workers and freelancers. The government has already allocated C$5.4 million for the Korean New Deal within its latest supplementary budget on July 6. A day after the unveiling, the country’s three mobile companies announced that they would collectively invest C$28.1 billion in establishing a nationwide 5G network by 2022.

Post-COVID soft power?

During his address, Moon said that the Korean New Deal is a blueprint for South Korea’s next 100 years, and described it as an opportunity to transition from a “follower economy” to a “leader economy.” This ambitious policy seeks to build upon Seoul’s success with the COVID-19 response and articulates the goal of establishing South Korea as a global leader through fast recovery and standard-setting practices. While some pundits may question the efficacy of such a broad initiative, Seoul has proactively put forward an ambitious policy experiment as its peers worldwide explore their post-COVID strategies.