40 Trillion Won Period Industry Fund Bill Proposed... Employment Retention Conditions

Lee Hak-young, a member of the Democratic Party of Korea, is asking a question to Deputy Prime Minister for Economic Affairs Kim Dong-yeon during the government-wide economic questioning session held at the National Assembly plenary session on the 2nd. Photo by Yoon Dong-ju doso7@

[Asia Economy Reporter Park Cheol-eung] On the 23rd, Lee Hak-young, a member of the National Assembly's Political Affairs Committee from the Democratic Party of Korea, announced that he has taken the lead in proposing a revision to the Korea Development Bank Act to establish the "Industrial Stabilization Fund for Crisis Overcoming and Employment."

This is the legal basis for the 40 trillion won fund announced by President Moon Jae-in at the 5th Emergency Economic Meeting the day before. The Industrial Stabilization Fund will be used not only for loans to industrial companies but also for asset purchases, debt guarantees and acquisitions, and equity investments. The resources will be raised through bond issuance and borrowings from the government and the Bank of Korea.

The supported industries include those with significant impact on the national economy and employment stability, such as air transportation, general-purpose machinery manufacturing, electric power industry, automobile engine and automobile manufacturing, ship and boat building, maritime transportation, and telecommunications.

Conditions such as employment maintenance and sharing of management performance may be imposed when providing fund support, and to prevent moral hazard, the use of funds for purposes other than support, such as dividends, treasury stock acquisition, and executive compensation payments, will be restricted.

A liability exemption clause for prompt execution is also included. In cases other than intentional or gross negligence, disciplinary actions and accountability will be exempted for results of proactive work processing.

Assemblyman Lee Hak-young said, "There is concern that the job crisis phase will deepen due to domestic demand recession and export decline caused by COVID-19," and added, "We will ensure the passage of the Industrial Stabilization Fund Act, a preemptive measure for employment stability, in the 20th National Assembly to protect jobs from the COVID-19 economic downturn."

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