Shipbuilding region support program extended two yearsA program supporting regions suffering as a result of the shipbuilding slump will be extended for two years, the government announced Tuesday.
Last year, the Ministry of Trade, Industry and Energy designated a number of regions largely dependent on shipbuilding as special industrial crisis zones. They were provided with employment assistance and tax incentives.
The designated regions include Mokpo in South Jeolla, Ulsan and a number of areas in South Gyeongsang, such as Geoje, Tongyeong and Changwon.
The extension came after Korean shipbuilding companies suffered a slump and the regions were hurt by massive job cuts. Korean shipbuilders, long critical contributors to the country’s economic growth and job creation, have been reeling from mounting losses in recent years caused by an industry-wide slump and competition from Chinese rivals.
The program, set to run for only one year until May 2019, will now continue through May 2021.
“Major shipbuilding companies are seeing a slight improvement in their performance due to an increased number of new orders,” the ministry said in a statement. “But an extension of the special industrial crisis zone designation is needed as revitalization of the regions is being delayed.”
Those who lost their jobs in the zones can receive subsidies and are qualified to participate in employment search programs. The government is providing financial support to subcontractors and small- and medium-sized companies in the region.
To reduce dependency on shipbuilding, the ministry plans to foster new growth by strengthening other sectors, developing new eco-friendly industries and boosting tourism.
The ministry said it plans to allocate additional funding to provide further assistance. The total was not released Tuesday.
Gunsan, North Jeolla, was not included as a region being granted extension, and the city’s designation will expire next year.
The region suffered a crushing economic downturn after Hyundai Heavy Industries shut down its shipyard in 2017 and GM Korea closed its factory there last year.
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