Government to Provide Proactive Support When Regional Key Industries Show Signs of Crisis

Resolution of the 'Jiyeok San-eop Wigi Daeeung Beop' at the Cabinet Meeting

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[Sejong=Asia Economy Reporter Kwon Haeyoung] In the future, legal grounds will be established for the government to proactively support when signs of crisis appear in regional key industries. Local governments will implement industrial crisis prevention measures targeting specific industries, and the government will be able to provide support to prevent the spread of economic recession.

The Ministry of Trade, Industry and Energy announced that the "Special Act on Regional Industrial Crisis Response and Regional Economic Recovery (Regional Industrial Crisis Response Act)" passed the National Assembly plenary session last month and was approved at the Cabinet meeting on the 10th.

Under the Special Act on Balanced National Development, since 2018, the government has designated six areas (Gunsan City, Dong-gu of Ulsan, Geoje City, Jinhae-gu of Changwon, Tongyeong City & Goseong County, Mokpo City, Yeongam County & Haenam County) as special regions for industrial crisis response and has been supporting regional economic recovery. However, the current system does not operate when signs of regional economic downturn appear and only provides after-the-fact support once the recession is in full swing, leading to criticisms that economic recovery takes a lot of time and cost.

Accordingly, the bill subdivides the stages of regional economic downturn into four phases: ▲pre-crisis ▲early crisis ▲mid-crisis ▲post-crisis, and includes measures to systematize support methods corresponding to each phase.

According to the bill, first, a regional economic continuous monitoring system will be established. ▲In the pre-crisis phase, local governments will take the lead in establishing and implementing prevention plans targeting specific industries, and the government will provide necessary support for implementation. ▲In the early crisis phase, when the main industry experiences a downturn, the area will be designated and supported to prevent the spread of economic recession. ▲In the mid-crisis phase, when both the main industry and regional economy are in recession, the area will be designated and support measures for economic recovery will be implemented. ▲In the post-crisis phase, once the economy has sufficiently recovered, the designation will be lifted, and if necessary, additional support will be provided to induce a smooth landing.

In addition, clear legal grounds will be established for support measures such as financial, employment, and industrial fiscal support, tax reductions, subsidies, and special measures related to industrial sites.

The law will take effect six months after promulgation.

An official from the Ministry of Trade, Industry and Energy stated, "To ensure smooth enforcement of the law, we plan to complete follow-up measures such as enacting subordinate statutes and building information systems without delay to establish a regional crisis response system."

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