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New Deal focuses on infrastructure

Government wants to spend its way out of 2009’s dismal economic outlook

Dec 17,2008
The government yesterday presented Korea’s New Deal, which aims to spend up to 65 percent of the money budgeted for social infrastructure projects and job stimulus programs in the first six months of the year. The goal is to stimulate the economy.

“We will not stop at managing the crisis but proceed to developing major core technologies for the future,” Finance Minister Kang Man-soo said. He added that a defensive posture alone can achieve nothing. At some point, offensive moves must also be employed.

The government plans to invest 24.7 trillion won ($18.3 billion) in social overhead capital centering on infrastructure, including refurbishing four rivers.

Infrastructure investments account for 2.4 percent of the nations’ gross domestic product. In addition to infrastructure, the government will be seeking expanded private sector investment in public projects, as well as improvements to railroad and public transportation systems. A total of 52.7 trillion won will be spent improving subway and national train stations.

Since land is essential to development, the government will adopt a land bank in which the Korea Land Corp. will purchase and safeguard land. It will then make the land available at appropriate times for low costs.

The expansion of both infrastructure and public transportation is meant to establish a system that not only improves the logistics system but also stimulates green growth.

The government will also be expanding investments in information technology and software industries. The government said high-tech investments would not only create jobs but also secure future growth engines. Information technology makes up 17 percent of the nation’s GDP. The government plans to invest 24 billion won in 2009 in radio frequency identification.

Other high-tech investments include digital textbook development and improving digital technology at hospitals.

The government said it will strengthen the green industry by incorporating environmentally friendly technology into current major industries such as semiconductors, steel and automobiles. The government will be investing 3 trillion won in the next four years on renewable energy development.



By Lee Ho-jeong Staff Reporter/ Kim Jong-yoon JoongAng Ilbo [ojlee82@joongang.co.kr]



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