Decision on Key Industry Fund... Business Community "Welcomes for Now, Urgent Need for Quick Support and Industry Expansion"

[Image source=Yonhap News]

[Asia Economy Reporters Kiho Sung, Changhwan Lee, Suyeon Woo, Dongwoo Lee] The 40 trillion won-scale Industrial Stabilization Fund, created in response to the novel coronavirus disease (COVID-19) crisis, will begin full-scale support starting with the aviation and shipping industries. The business community emphasized that rapid support is most important, along with expectations that fund support will expand to other industries.

According to the Financial Services Commission on the 12th, the amendment to the Enforcement Decree of the Industrial Bank Act to establish the Industrial Stabilization Fund passed the Cabinet meeting on the same day. The initial support targets have been set as two industries: aviation and shipping.

Originally, the industries mentioned as support targets were seven: aviation, shipping, machinery, automobile, shipbuilding, electricity, and telecommunications, but this was revised during the consultation process with related ministries. Other industries will be designated after the Financial Services Commission hears opinions from the relevant ministries and consults with the Ministry of Economy and Finance.

For now, the business community welcomes the government's support. Kyungsang Lee, Head of the Economic Research Department at the Korea Chamber of Commerce and Industry, said, "Deciding to support the most urgent industries, aviation and shipping, seems to be an appropriate choice," emphasizing, "Because aviation and shipping are virtually paralyzed due to the impact of COVID-19, urgent government support is necessary."

The business community also stressed that rapid support is crucial. A business official said, "If the fund operation committee members are selected, and after their review, the final support is decided, it will take too long," adding, "For companies, where even the situation in May cannot be guaranteed, the success of the fund will depend on the speed of execution."

The Fund Operation Committee consists of seven members with a two-year term, filled by personnel recommended by related organizations such as the relevant standing committees of the National Assembly, the Minister of Economy and Finance, the Minister of Employment and Labor, the Chairman of the Financial Services Commission, the President of the Korea Development Bank, and the Chairman of the Korea Chamber of Commerce and Industry. The committee members are expected to be recommended and formed by the end of this month.

Industries excluded from the initial support targets still have high expectations. Dalseok Shin, Director of the Automobile Industry Cooperative, said, "Although only aviation and shipping have been designated for now, I believe that the automobile industry will be included later through further consultations," adding, "The government is well aware of the urgent situation on the ground, so I expect the process to proceed quickly."

A representative from the automobile industry said, "We are currently organizing internal opinions regarding the government's decision, so it is difficult to express an exact position yet," but added, "Considering the importance of the automobile industry, we expect it to be additionally designated through the committee's review later."

Another business official said, "Due to the spread of shocks from COVID-19 such as low oil prices, industries like automobile and shipbuilding have suffered considerable damage," and added, "Since the government announced the 'policy to support seven industries,' we hope the support schedule for other key industries will be decided promptly."

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