Confident in Business Performance... President Moon Directly Declares 'Korean New Deal 2.0' (Comprehensive)

Korean New Deal Total Project Cost Expanded to 220 Trillion Won by 2025... 'Human New Deal' Added to Strengthen Safety Net

[Asia Economy Reporter Ryu Jeong-min] President Moon Jae-in’s direct proclamation of ‘Korean New Deal 2.0’ through the Blue House keynote speech on the 14th reflects confidence in the achievements of the past year.

The Blue House self-assesses that projects such as the Digital New Deal and Green New Deal have served as a catalyst for overcoming the economic crisis caused by COVID-19. Earlier, the International Monetary Fund (IMF) also evaluated in its annual consultation report last March that "the Korean New Deal is a welcomed strategy for securing new growth engines and enhancing inclusiveness in the post-COVID era."

As major achievements of Korean New Deal 1.0, the Blue House cited the establishment of a big data platform, construction and opening of artificial intelligence (AI) training data, and digitalization of educational infrastructure and social overhead capital (SOC) in the Digital New Deal sector.

[Image source=Yonhap News]

In the Green New Deal sector, achievements included the expansion of electric and hydrogen vehicle distribution and support for renewable energy dissemination, laying the foundation for a low-carbon and eco-friendly transition. Additionally, it explained that private investment expanded through participation in AI and data projects via the Data Dam project and announcements of renewable energy investment plans such as the Ulsan floating offshore wind power.

President Moon also stated in his keynote speech that "the national development strategy we presented a year ago has become a universal direction pursued by the world, as confirmed at the Group of Seven (G7) summit," and added, "With confidence that our choice was right, we are announcing a strengthened Korean New Deal 2.0."

The main feature of Korean New Deal 2.0 is the addition of the ‘Human New Deal’ concept, based on strengthening the social safety net, to the existing Digital New Deal, Green New Deal, and Regional Balanced New Deal. A Blue House official explained, "It was expanded to the ‘Human New Deal’ reflecting the increased need for investment in people, resolving inequality and gaps, and the necessity of youth support."

With the transition to Korean New Deal 2.0, the total project cost (including national, local, and private funds) has expanded from the existing 160 trillion won to 220 trillion won by 2025. National funds increased from 114.1 trillion won to about 160 trillion won. The 2022 national budget, which the Moon Jae-in administration will prepare, also increased from the existing 23.2 trillion won to over 30 trillion won.

New tasks were added to the Korean New Deal 2.0 project. In the Digital New Deal, fostering hyper-connected new industries such as the metaverse was added, and in the Green New Deal, the establishment of a carbon-neutral promotion foundation was included. Blue House Deputy Spokesperson Lim Se-eun said, "The Human New Deal will newly pursue youth policies and ‘gap resolution,’" and added, "The Regional Balanced New Deal plans to expand administrative and financial incentives to promptly discover and implement local government-led projects."

Although the Blue House revealed the expanded concept of Korean New Deal 2.0 based on the achievements of the past year, the fact that only 10 months remain in the Moon Jae-in administration is a limiting factor. Continuity of policy is important to continue the leading national transformation envisioned by the Blue House, but it is uncertain whether the next government will maintain the current direction.

Furthermore, whether the cooperative stance of the private sector will be maintained and whether the COVID-19 situation will enter a recovery phase are expected to be variables that determine success or failure. President Moon emphasized, "The Korean New Deal is a hope for overcoming COVID-19 and a future strategy for the Republic of Korea beyond our government," and said, "The Korean New Deal will be our strongest policy tool."

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