I am glad to meet all of you here with us in person and online.
Amid the grave COVID-19 situation, the Government and entire financial sector are pulling together to overcome the economic crisis. Taking it a step further, we are gathered here to usher in the Republic of Korea’s future in the name of the “Korean New Deal.”
Today, some 40 representatives from Korea’s financial sector are joining us either in person or via videoconferencing. Fifteen financial institutions whose assets account for more than half of those held by the financial sector in Korea are with us. In particular, all 10 CEOs of Korea’s financial holding companies are participating. Many financial associations are also taking part by videoconferencing.
From the ruling party, newly elected Chairman Lee Nak-yon and Floor Leader Kim Tae-nyeon are present here to provide strong support to the Korean New Deal initiative despite their busy schedules. Also with us via videoconferencing are those in charge of the party’s K-New Deal Committee, including the Policy Committee Chairperson. Thank you.
The financial sector has played an immense role every time the country has faced difficulties. Now in this very tough situation caused by COVID-19, it has voluntarily taken on the role of a relief pitcher and is seamlessly implementing programs worth over 175 trillion won to stabilize people’s livelihoods and finances as agreed upon with the Government.
Support from the financial sector has made it possible to carry out emergency economic measures that have sustained our economy – the microbusiness owners’ management-stabilization funds and universal emergency relief payments. Last week, the financial sector decided to extend the due dates and defer interest payments on loans for microbusiness owners and SMEs for six months through next March.
It can be said that our financial sector’s role in the revival of businesses and the protection of people’s jobs is truly tremendous. Once again, I am deeply grateful to the financial sector for its contribution.
The Government is vigorously pushing ahead with the Korean New Deal as a new national strategy for the Republic of Korea’s future. This Korean New Deal will be successful when private sector-led investment is boosted and the people participate enthusiastically. To this end, active financial support is required. This is why we are holding the first Korean New Deal Strategy Meeting together with representatives from the financial sector.
The Korean New Deal will open the future of the Korean economy through New Deal funds and New Deal financing. Together with the people, we aim to spearhead the Korean New Deal’s success based on three pillars – fiscal spending, financing from state-run financial institutions and private sector financing. The largest-ever investment in a single project will be made through a “participatory New Deal public fund” and “financing from state-run and private financial institutions.”
We will set up the participatory New Deal fund – a policy fund worth 20 trillion won – to intensively invest in Korean New Deal sectors. We will also create an “Infra Fund” to invest in New Deal-related infrastructure and also make it possible for the people to enjoy more stable returns through loss risk-sharing and tax benefits.
In addition, the Government will actively cultivate investment conditions for private sector entities to create New Deal funds on their own initiative. We plan to develop a New Deal index and soon launch related investment products. If people invest in the participatory New Deal fund, they will be able to share in the results and sense of satisfaction. On top of generating profits for individuals, it will be an opportunity for them to directly invest in the Republic of Korea’s future and social values.
More than anything else, financing from state-run and private sector institutions is pivotal to the success of the Korean New Deal. Over the next five years, state-run and private financial institutions will inject 100 trillion won and 70 trillion won, respectively, into Korean New Deal projects and businesses. The Government’s pump-priming, the state-run financial institutions’ active involvement and private sector cooperation have helped establish the physical foundation from which to vigorously push the Korean New Deal forward. It is also very meaningful that abundant liquidity in the market is being directed from non-productive areas such as real estate to productive fields. Since the Government and financial sector have joined forces for the Republic of Korea’s future, I look forward to this providing great hope for our economy and people.
The Government will swiftly promote improvements in the related systems and the regulatory innovation needed to facilitate the Korean New Deal. Regulatory innovation is another prerequisite for the Korean New Deal’s success. The Government and the ruling party formed a task force together with the business community last month to reform laws and systems related to the Korean New Deal.
We will push ahead as planned with legislation for the Korean New Deal’s success and rapidly identify and reform unnecessary regulations. Above all, we will boldly abolish regulations that limit New Deal-related projects and business activities.
The future belongs to those who prepare for it. While pooling all our strengths to quickly escape from the current crisis, we cannot – for even a moment – stop pioneering the Republic of Korea’s future. It is dependent on the Korean New Deal. Today, the Government and financial sector took a great step forward together. I believe that the people will also come together as well.