Korea to provide $400 million in foreign aid

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Korea to provide $400 million in foreign aid

Korea’s Finance Ministry announced plans Monday to provide $400 million in funding for quarantine and sanitization projects in developing countries in a bid to minimize the pandemic’s effects on Korea’s exports.

During a ministerial meeting, Finance Minister Hong Nam-ki also said the government would commit to $7 billion in assistance over the next three years to a range of countries including Russia, Mongolia and countries in Southeast Asia.

“We will immediately supply more than $400 million via economic development cooperation funds to emerging economies’ Covid-19 quarantine projects,” Hong said during a ministerial meeting on Monday.

“We will also suspend $110 million worth of debt owed by 26 low-income countries.”

Hong said the Korean government will push the so-called K-quarantine model to “aggressively” strengthen economic cooperation and open new markets for Korean exporters.

He added that the government will come up with plans to develop major overseas infrastructure projects to help Korean businesses expand overseas.

With trade at a near standstill across much of the globe as the coronavirus continues to impact major economies, worries over the effects on the Korean economy have grown.

Exports are equal to 35.2 percent of Korea’s GDP.

“The sharp decline in global trade is having a huge impact on our economy, particularly exports,” Hong said. “Uncertainties and external volatilities including the sharp drop in international crude prices and foreign direct investment have risen,” Hong added. “The impact [of the coronavirus] is becoming real, and our exports as of the first 20 days of this month have shrunk 26.9 percent.”

Not only have the movement of people and resources between countries been cut off due to the coronavirus, Hong said, but there has been disruption in orders as well as the suspension of Korean plants overseas.

The finance minister said the importance of digital trade has grown amid the pandemic, and the Korean government will actively participate in e-commerce.

The concept of the so-called K-quarantine model was first raised by President Moon Jae-in a week ago during a meeting with the top Blue House aides.

Moon predicted Korea’s economy and the K-quarantine model will become the global standard in overcoming the crisis.

While the number of confirmed cases had grown to nearly 3 million as of Monday while the number of Covid-19 deaths soared past 200,000, Korea has earned worldwide praise for successfully flattening the curve of new cases in the last month.

Meanwhile, the leading Korean business representative asked the government that the hundreds of trillions of won in supportive measures announced previously by the government flow into the market smoothly and swiftly.

During a Monday meeting between Finance Minister Hong Nam-ki and the heads of the five leading business lobbying groups to discuss the pandemic’s impact on the Korean economy, the business groups requested the government temporarily lift regulations on employment, distribution and environment.

The meeting was held ahead of the official launching of a central disaster headquarters for economics, which Hong will oversee.

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