Assemblyman Shin Jeong-hoon: "More than half of last year's successful export companies have stopped exporting this year"

[Asia Economy Honam Reporting Headquarters Reporter Park Seon-gang] It has been revealed that COVID-19 has dealt a significant blow to the exports of small and medium-sized enterprises (SMEs).

According to data submitted by the Korea Trade-Investment Promotion Agency (KOTRA) to Shin Jeong-hoon, a member of the National Assembly's Industry, Trade, Energy, Small and Medium Business Committee (Democratic Party of Korea, Naju-Hwasun), more than half of the companies that succeeded in exporting last year through the ‘Export Enterprise Project’ have suspended exports in the first half of this year.

The number of companies that stopped exporting in the first half of this year reached 1,114 (50.4%) out of 2,207 companies that succeeded in exporting last year. The figure is expected to increase further when including the second half of the year.

KOTRA’s ‘Export Enterprise Project’ is a representative export support program aimed at expanding the export base of domestic companies and providing new growth engines for SMEs. It matches domestic companies or companies with export amounts under $10,000 with export specialists to support the entire export process from trade practices to finding business partners and contracts.

Through the Export Enterprise Project, 1,621 companies succeeded in exporting in 2017, 2,003 in 2018, and 2,207 in 2019. However, the export suspension rates of these companies in the following year were 40.1% in 2017, 38.8% in 2018, and 41.4% in 2019, showing a consistently high suspension rate around 40%, which has been pointed out as a chronic problem of the Export Enterprise Project.

Moreover, this year, the prolonged COVID-19 pandemic has caused even more severe damage.

Assemblyman Shin Jeong-hoon said, “Most of the companies participating in the Export Enterprise Project are small-scale SMEs that lack the capacity to respond to COVID-19 and global financial crises,” adding, “Special support is needed to help SMEs continue exporting despite the difficult circumstances.”

He continued, “KOTRA should establish an ‘Export Maintenance Support Program’ that comprehensively supports export diversification and market expansion, and systematically assist SMEs expected to be particularly hard hit by COVID-19.”

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