Spending to try to bolster exports will hit a recordThe government will earmark a record 1.07 trillion won ($894 million) to support exports next year.
The Ministry of Trade, Industry and Energy said Friday that it has dedicated a record amount next year to stimulate exports by finding new markets and helping small- and medium-sized companies.
The announcement follows a disappointing export performance throughout this year. Outbound shipments last month plunged 13.6 percent from the previous year, the ninth consecutive month of on-year declines.
Korea’s exports have been slammed by a price slump in semiconductors, the top export category, and the ongoing U.S.-China trade conflict.
Semiconductor exports, which accounted for 18.1 percent of the total last month, were down 30.7 percent from the previous year.
An overreliance on certain export items and growing global trade uncertainties have led to calls for changes in the country’s existing trade structure.
The Trade Ministry said it will finalize a reform plan next week after discussions with trade groups and research institutes.
For next year’s trade insurance fund, 2 trillion won will be used to support small- and medium-sized businesses trying to do business in emerging markets. Korea will also target emerging markets across Asia under the administration’s “New Southern” and “New Northern” policies. The government is trying to raise the share of exports to such countries to 30 percent in the near future from 21 percent last year.
“In order for a recovery in exports, we can’t simply wait for the global economy to recover,” said Trade Minister Sung Yun-mo during a meeting with trade officials at the World Trade Center Seoul. “We need efforts to fundamentally reform our industries, companies and products.”
Headwinds to trade, however, keep increasing as Korea’s diplomatic and economic feud with Japan shows no sign of resolution. Both countries have removed each other from their list of preferential trade partners.
The government already has plans to spend 22 billion won by the end of this year through a supplementary budget on research and development for industrial materials and ways to reduce reliance on Japanese imports.
Finance Minister Hong Nam-ki acknowledged earlier this week that it would be difficult for the country to meet the government’s economic growth target range of 2.4 to 2.5 percent.
BY CHAE YUN-HWAN [firstname.lastname@example.org]