The South Korean government has recently introduced a set of measures that should help impulse investments and counter current issues on the way to sustainable economic growth. Mainly, it is working toward increasing efforts to facilitate cross-ministerial activities as well as regional redevelopment for the purpose of expediting the recovery of its economy and improving the lives of its people.
Some of the planned seventy initiatives include the ‘Expanded Investment Express,’ an attempt spearheaded by vice ministers of relevant ministries to tackle existing obstacles to investment. From this month, this program will entail efforts to unveil constraint that may be exerting negative impacts on the investment in diverse sectors. Moreover, from October, relevant ministers will hold talks with the six major economic organizations and enterprises, and representatives of the industries to explore further development of investment promotion.
The government is also heading to approve the third project of the ‘Regional Revitalization Investment Fund,’ intended to allay the economic development of various regions of the country. This is among the measures being taken in order to make economic recovery experienced by the entire country and not only in big cities of South Korea.
Due to the new paradigm in the international economy, South Korea is seeking ‘FX market reform’ where as the South Korean foreign exchange market is a relatively semi-closed and regulated structure, the same is expected to turned into an open and competitive market. Starting from July 2024, foreign financial institutions will be allowed to participate in the onshore FX market, and trading hours will be extended from the current closing time of 15:From 30 to 2:00 of the following day (KST). It is anticipated that this step would increase the intensity of competition also in South Korea’s financial markets and would attract more foreign capital.
On also can name the problems connected with the aging population and sustainability of pension system as one of the government’s priorities. South Korean President Yoon Suk Yeol has promised to adjust the pension plan which is expected to be depleted by 2055. Due to an increasing number of retirees, the government is to discuss such changes as the benefit rates and the number of premiums that will help the practice sustain itself in the future.
The country’s technology sector is also advancing with South Korea trying to prop up its semiconductor industry that forms an important part of the nation’s export model. The government aims to provide elaborate actions during the next month to strengthen this crucial segment that has recently experienced some difficulties because of changes on the world markets and rising competition.
The administration is also concerned with the growth of digital economy, and risks to democracy from technology sector. The issues that this year’s summit focused on included fake news, which was also connected to AI and deep fakes, with the issue of having effective measures in place to prevent the interference of strong artificial intelligence in democracies.
Thus, to counteract the labor deficit problem in the key areas, the government has decided to place military surgeons and public health doctors at hospitals. Twenty military surgeons in addition to 138 PH practitioners will be stationed in 20 hospitals for four weeks in an effort that shows the administration’s capacity to respond to pressing healthcare issues, in the short-term aside from beginning to look for longer term solutions to the healthcare workforce issues.
Despite it all, in the sphere of international relations, South Korea is seeking to advance the recent Free Trade Partnerships. Consultations on improving the areas of the CEPA are ongoing and the next round of CEPA discussions will be held in Seoul. The actions are tentative moves designed to help South Korea expand its trading partners while reducing reliance on a specific market.
The government is also keen on the real estate segment, especially after finding out that prices of housing remained elevated in July. Government is therefore closely observing these trends, and weighing the actions it might undertake to sustain decent housing and order in the real estate market.
As South Korea has been experiencing various challenges of the global economy the actions of the government show that the concerns are on both short and long-term problems. Realizing its vision of putting South Korea on investment promotion, market reform, technological sophistication, and social well being in the future years to come.
