Government to Provide '40 Trillion KRW + α' Liquidity and Capital Expansion Support for Key Industries with Significant Impact on Jobs and Exports

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[Asia Economy reporters Kim Hyunjung, Joo Sangdon (Sejong), Jang Sehee] The government has decided to provide liquidity and capital expansion support amounting to "40 trillion won + α" to key industries with significant impacts on jobs, exports, and the national economy, including aviation, shipping, automobiles, shipbuilding, machinery, power, and telecommunications. However, this support is conditional on employment stability and other requirements.

On the 22nd, the government announced these measures in a joint briefing with related ministries at the Government Complex Seoul under the title "Employment and Corporate Stability Measures to Overcome the Job Crisis."

So far, the government has sequentially prepared measures exceeding 150 trillion won, including ▲32 trillion won in physical damage countermeasures, ▲100 trillion won + α in financial stability measures, and ▲21 trillion won in additional reinforcement measures such as emergency disaster relief payments. Despite these support measures, the employment shock has intensified, with the number of new hires turning negative for the first time in about 11 years due to the domestic demand slump. In particular, employment sharply declined in service sectors such as accommodation and food services, retail, and education, which were heavily affected by social distancing measures. The government is concerned that if real shocks such as export declines are added in the future, the job crisis will deepen further.

Therefore, to overcome the emergency economic situation caused by the novel coronavirus infection (COVID-19), the government sees the need to implement extraordinary measures to protect jobs, which are the foundation of people's livelihoods. To absorb the employment shock, it has prepared a "Special Employment Stability Measure" through fiscal support and a "Corporate Stabilization Support Plan" to save companies, which are the basis for protecting jobs.

First, to stabilize employment, the government will implement an employment stability package worth a total of 10.1 trillion won focusing on four major areas: ▲support for employment retention of small business owners and companies, ▲measures for workers' livelihood stabilization, ▲emergency job creation, and ▲support for the unemployed. The target is 2.86 million people. Specifically, 900 billion won will be invested to ease conditions for unpaid leave support, expand special employment support industries, and establish a new employment retention fund loan project. Additionally, 1.9 trillion won will be allocated to stabilize the livelihoods of 1.13 million workers in blind spots of employment insurance such as freelancers, and 3.6 trillion won will be invested in non-face-to-face and digital government jobs, public jobs for vulnerable groups, and youth job experience support. Support for the unemployed, including job search benefits and vocational training, will also be expanded by 3.07 trillion won.

Of the total 10.1 trillion won, 800 billion won, which can be implemented immediately through fund reallocation and contingency funds at the government level, will be promptly executed, while the remaining 9.3 trillion won will be pursued with the consent of the National Assembly.

As part of protecting jobs, the government will also strengthen the support system to ensure no blind spots in assistance for affected companies. First, an additional 35 trillion won will be provided, including ▲expansion of financial support for small business owners (+10 trillion won), ▲purchase of corporate bonds, commercial papers, and short-term bonds including low credit ratings (+20 trillion won), and ▲additional expansion of COVID-19 response P-CBO supply (+5 trillion won).

Along with this, on the condition of employment stability, prevention of moral hazard, and sharing of benefits from corporate normalization, the government will provide support amounting to "40 trillion won + α" focusing on seven key industries: aviation, shipping, automobiles, shipbuilding, machinery, power, and telecommunications.

To swiftly raise the fund, the government plans to submit the "Amendment to the Korea Development Bank Act" to the National Assembly by the 24th and submit the national guarantee consent for fund bonds to the Cabinet meeting scheduled for the 28th before submitting it to the National Assembly.

This content was produced with the assistance of AI translation services.