220 Trillion Won Invested in 'Korean New Deal 2.0' for Youth Job and Education Polarization Measures

Creation of 2.5 Million New Jobs by 2025
50 Trillion Won Invested in 'Human New Deal' Including Youth + Education and Care Support
Over 30 Trillion Won Reflected in Next Year's Budget... Additional Measures to Be Announced in July

President Moon Jae-in speaking at the 4th Korean New Deal Strategy Meeting held at the Blue House on the morning of the 14th. At this meeting, President Moon announced the 'Korean New Deal 2.0 Promotion Plan' to be newly implemented this year. (Image source=Yonhap News)

[Sejong=Asia Economy Reporter Moon Chaeseok] The government is promoting the 'Korean New Deal 2.0' policy focused on expanding employment and social safety nets. While the New Deal 1.0 implemented over the past year focused on 'industrial restructuring' such as eco-friendly and low-carbon energy transition and revitalizing the digital industry using data dams, New Deal 2.0 places emphasis on 'resolving polarization.' The project budget will also increase from 160 trillion won to 220 trillion won. Fifty trillion won will be invested in youth job creation and asset formation support, as well as policies to resolve educational polarization. Through this, the government plans to create 2.5 million new jobs by 2025.

On the 14th, the government announced plans to promote the Korean New Deal 2.0 policy by adding the 'Human New Deal' policy to the Green New Deal and Digital New Deal of New Deal 1.0. The main tasks of the Human New Deal are investment in people, employment and social safety nets, youth policies, and gap reduction. The total project budget will increase by 60 trillion won to 220 trillion won. The national budget will expand from 114.1 trillion won to about 160 trillion won.

50 Trillion Won Invested in Youth 'Quality Jobs + Asset Formation' and Resolving Educational Polarization

The Human New Deal, which plans to invest 50 trillion won, focuses on providing opportunities for youth to obtain 'quality jobs' and preventing vulnerable groups from being left behind in society. The goal is to nurture young talent working in high-income industries such as digital, green, software, and the Big 3 (system semiconductors, future cars, bio-health). Along with this, integrated support for 'assets, housing, education, and employment' will be provided so that youth can properly become independent in society.

In particular, several new project items have been introduced to help asset formation. These include the 'Youth Tomorrow Savings Account,' which allows saving 100,000 won monthly with the government adding another 100,000 won so that a lump sum of 10.8 million won can be prepared after three years; the 'Youth Hope Savings,' which offers higher interest rates than commercial banks to youth with median income below 150%; and the 'Youth Income Deduction Long-term Fund,' which provides up to 40% income deduction on fund contributions for those with total annual salary below 50 million won.

Additionally, as part of protecting vulnerable groups, a '4 Major Education Improvement Package (Comprehensive Education Recovery Plan)' will be introduced to minimize learning loss. The government also plans to establish social service centers to increase care services and strengthen care safety nets for groups such as single parents, the elderly, disabled persons, and children.

Strengthening Green New Deal Including Greenhouse Gas Measurement and Emissions Trading System Maintenance

The core of the Green New Deal, which will invest 61 trillion won, is strengthening infrastructure to achieve carbon neutrality by 2050. A new task called 'Establishing a Carbon Neutrality Promotion Foundation' has been added in New Deal 2.0 to fulfill the 2030 national greenhouse gas reduction target (NDC). At the end of last year, the government proposed a plan to reduce greenhouse gas emissions by 24.4% compared to 2017 emissions (709.1 million tons) by 2030. The Carbon Neutrality Committee is scheduled to announce an upward revision of the NDC target by the end of October.

To realize the new task, the government plans to enhance the greenhouse gas measurement system and the effectiveness of the emissions trading system. Through establishing digital-based resource circulation industrial complexes, support will be provided to implement a 'circular economy' in carbon-intensive industries such as steel. Regarding this, the government announced last year plans to create 15 smart green industrial complexes nationwide by 2025.

In addition, the Digital New Deal (49 trillion won) and Regional Balanced New Deal (62 trillion won) will be promoted simultaneously. The Regional Balanced New Deal is newly added in 2.0 and focuses on increasing administrative and financial incentives for excellent local government-led projects.

Over 30 Trillion Won Reflected in Next Year’s Budget... Follow-up Measures on Youth Policies to be Announced in July

Amid the implementation of Level 4 social distancing, schools in Seoul have switched to remote classes. On the morning of the 14th, a teacher is conducting an online class in a 5th-grade classroom at Muhak Elementary School in Seongdong-gu, Seoul.

To accelerate project progress, the government plans to reflect more than 30 trillion won in next year’s budget. More than 9 trillion won will be invested in the Human New Deal, over 12.3 trillion won in the Green New Deal, and over 8.7 trillion won in the Digital New Deal. Over 12 trillion won will be spent on the Regional Balanced New Deal. Additionally, a 100 billion won scale 'National Participation New Deal Fund' will be newly established to encourage private sector participation.

The government plans to announce additional measures related to polarization resolution and industrial restructuring within this month, including the 'Comprehensive Education Recovery Plan,' 'Youth Policies (tentative),' 'Proactive Business Structure Restructuring Activation Plan,' 'Fair Labor Transition Support Plan,' and 'Small and Medium Enterprise New Business Entry and Restart Promotion Plan.'

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