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2 trillion won promised for materials and parts support

Aug 15,2019
Finance Minister Hong Nam-ki said the government next year will establish a budget of at least 2 trillion won ($1.65 billion) in support of the materials and parts-related industries.

Additionally, the Korean government will execute a 16.5 trillion infrastructure budget in the second half of 2019 in order to boost the domestic economy as Korea faces major headwinds, including dwindling exports and trade tensions with Japan.

“Last time, the government said the net increase of the budget related to materials and parts would be 1 trillion won or more,” Hong said. “As a finance minister, I will say the total budget will be around 2 trillion won or more.”

When the National Assembly approved the 5.83 trillion won supplementary budget earlier this month, it included 273.2 billion won to counter Japan’s trade restrictions, where 65 billion won will be used for developing materials and parts technologies and 21.7 billion won used to help small- and medium-sized enterprises’ innovation.

Pressure has been growing for next year’s budget on materials and parts to be increased.

Hong said the government is in its final stage of developing next year’s budget proposal, which will be submitted on Sept. 3.

He added that the government is currently working on the budget so that funding of materials and parts will be more consistent and permanent.

“The government is looking into ways of securing a stable budget that would help the independence of the materials, parts and equipment businesses, which despite the will to do so have repeatedly failed,” Hong said. “The budget department is looking into the possibility of creating a fund or a special account [for specific purposes].”

The finance minister also said the government will be simplifying approval processes for major infrastructure projects in hopes of boosting the domestic economy.

“We have decided to improve 26 regulations, including simplifying the process for total construction cost changes and the evaluation of construction companies,” Hong said Wednesday. “Through the improvement, we will reduce unnecessary costs and improve the management conditions of the construction industry.”

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]