The global economy is sliding into a severe recession. Our economy, which is heavily dependent on overseas markets, is also suffering a tsunami-like impact. We are in a dark tunnel with no end in sight. Vulnerable SMEs and businesses run by the self-employed are being driven to the brink of survival. Large businesses and flagship industries are also facing growing burdens on management. The Government is working its hardest to save businesses and protect jobs for our people. We are promptly taking unprecedented steps and coping with an unparalleled economic crisis. We have set out to support businesses through 100 trillion won in emergency financial measures. We have also decided to offer emergency relief payments to the people, the first time in history.
These steps are still not sufficient. The Government will come up with necessary measures whenever needed to overcome the crisis while faithfully playing its role as a buttress for businesses and people undergoing hardship and difficulties. We will mobilize all available resources and not hesitate to inject financing in a bold and proactive manner. The entire world is moving together toward that path. The Government will step up efforts to surmount the present challenges and prepare for greater threats that might be in store such as employment instability and a corporate liquidity crisis.
The Government is bringing the current emergency situation under thorough management with a heavy sense of responsibility to safeguard the national economy. We are implementing countermeasures one by one and also bracing for any future crisis by predicting what has yet to even arrive.
If we are fortunate enough to bring the COVID-19 outbreak under control earlier than other countries, we can be presented a chance to jump-start the economy ahead of other countries. We are working out measures to speed up the economic recovery through preemptive preparations in order not to miss the proper timing to stimulate the economy. I hope that people put their trust in the Government and pool their strengths.
As part of the efforts to turn this crisis into an opportunity, today’s 4th Emergency Economic Council meeting will make decisions on how to enhance export vitality, improve domestic demand and support startups and business ventures.
First, we’ve devised support measures for export companies hit severely by the collapse of global supply chains and the contraction of transactions. We will initially supply additional trade financing worth more than 36 trillion won. Should importers' credit ratings drop due to the COVID-19 outbreak, it could impede our exports. To prevent this, we will extend the expiration dates of export insurance policies and guarantees for another year as they come due. This will have the same effect as providing 30 trillion won to exporters. In addition, emergency funding totaling 1 trillion won will be distributed to provide liquidity for export companies.
We will also preemptively supply more than 5 trillion won in trade financing so that domestic businesses will be able to actively engage in winning contracts at a time when the global economic stimulus comes into force. We will ensure that businesses do not miss export opportunities due to financial constraints. With exports, it’s also possible to create new opportunities in a time of crisis. Just as Korea’s infectious disease prevention and control model is emerging as a global standard, we will actively develop and spread Korean-type export models in line with the new trading environment in the COVID-19 era. We will utilize the strength of our world-class IT infrastructure to make the entire export process – consultations, contract and settlement – available online. In addition, we will redouble our efforts to create new marketing opportunities through online special exhibitions and permanent exhibition platforms that do not need face-to-face contact.
We will also proactively respond to the reorganization of global supply chains. We will secure stable supply chains by further developing the know-how accumulated in the course of coping with Japan’s export restrictions. In particular, most domestic factories can operate normally – free from any lockdowns or restrictions on movement – thanks to our effective infectious disease prevention and control measures. For this reason, the perception of the Republic of Korea as a “safe and transparent production base” is etched on the minds of many people around the world. Trust in “Made in Korea” has heightened further. Drawing on this status, we will create an opportunity to facilitate the return of key domestic companies from overseas, investment and global M&As.
Second, we have prepared additional complementary measures worth 17.7 trillion won in order to revive domestic demand that has frozen rapidly. To respond in kind to the Good Consumption Campaign, the public sector will take the initiative to help create over 3.3-trillion-won worth of demand quickly through advanced payments and purchases. Not only central government ministries and agencies but public institutions, local governments and regional public corporations will all participate in these efforts to provide assistance to commercial areas in every corner of the country that are now experiencing difficulties. The Government will also actively support and encourage the private-sector-led Good Consumption Campaign through unprecedented tax benefits.
In addition to that, we will decide on special measures today to ease still more tax burdens valued at approximately 12 trillion won given that the number of businesses in deficit is increasing as management conditions deteriorate due to the COVID-19 outbreak and nearly 7 million individual business owners are suffering increasing losses. For the vulnerable at risk of being in arrears with debt or interest payments, the Government has also laid out measures to reduce the debts of individuals and support their recovery. I look forward to these measures providing some assistance to help the people endure and prevail over hardships.
Third, we have also come up with countermeasures tailored to startups and business ventures in order to continue to strengthen our economy’s driving force for innovation despite the difficult circumstances. We will supply additional funds worth approximately 2.2 trillion won by providing more low-interest loans and boldly expanding incentives to private sector-led venture investments along with the introduction of new special support for guarantees.
We will become a Government that is not shaken amid crises and one that actively prepares for a new leap forward. Our people have enthusiastically put into practice a spirit of solidarity and cooperation in their infectious disease prevention and control efforts. They have clearly demonstrated their potential to the world. The people are coming forward as the main players not only in the infectious disease prevention and control efforts but also in the economy by endeavoring to surmount the economic crisis. They are voluntarily participating in the Good Landlord Campaign and the Good Consumption Campaign. They are again showing the strength of our people who become even stronger in a time of crisis. They are our proud people. The Government will put its faith in the people and weather any rough winds and waves together with them without fail. We will wisely surmount this crisis and move toward a resilient and strong economy.