Lee Ju-yeol "Economic Recovery in the First Half Faster Than Expected... Must Prepare for Post-COVID-19"

Lee Ju-yeol, Governor of the Bank of Korea
Congratulatory Address at the IGE-Shinhan Financial Group International Conference

[Image source=Yonhap News]

Lee Ju-yeol: "Focusing on Preparing for the 'Post COVID-19' Era through Digitalization and Transition to a Green Economy"

[Asia Economy Reporter Kim Eun-byeol] Lee Ju-yeol, Governor of the Bank of Korea, evaluated that the economy showed a faster-than-expected recovery in the first half of the year and expressed the view that efforts should now focus on preparing for the post-COVID-19 situation, including digitalization and the transition to a green economy.

On the 2nd, Governor Lee delivered a congratulatory video message at the 'Institute of Global Economics (IGE) - Shinhan Financial Group International Conference,' stating, "Our economy showed a faster-than-expected recovery in the first half of this year, thanks to proactive policy responses and the global economic recovery," and added, "Although the spread of the Delta variant continues, a solid recovery trend is expected to continue due to expanded vaccination and strong exports."

He continued, "Until now, our attention and efforts have focused on overcoming the immediate COVID-19 crisis, but now it is time to focus more on preparing for the post-COVID-19 situation," adding, "It is not easy to predict exactly how the post-pandemic era will unfold, but it is clear that digitalization and the transition to a green economy have become an irreversible trend triggered by COVID-19."

Regarding the acceleration of digitalization, Governor Lee said, "During this crisis, non-face-to-face economic activities of households and businesses have increased, and dependence on digital technologies and network-based platforms across industries has grown," and "In particular, as financial services by big tech and fintech companies expand, digital transformation is being pursued as a top priority in the financial industry."

Governor Lee noted that while the transition to a digital platform economy enhances convenience and efficiency, attention must also be paid to the side effects of rapid digitalization. He explained, "When a single platform successfully establishes itself, its dominance tends to strengthen and its spread accelerates, which can hinder competition and innovation," and added, "Since trust can be undermined by security breaches or information leaks, shaking the foundation of the digital economy, the success of the digital economy transition depends on how thoroughly risks are prepared for."

He also emphasized that environmental issues, once considered distant or someone else's problem, can no longer be ignored. Governor Lee said, "Recent carbon neutrality declarations by governments worldwide and the strengthening of ESG (Environmental, Social, and Governance) management by companies and financial institutions clearly demonstrate this shift," advising, "Although the voluntary acceptance of the transition to a green economy is low due to cost and technological limitations, if appropriately addressed through improvements in production methods and industrial restructuring, it can become a 'game changer' for our economy."

Furthermore, Governor Lee stressed, "While digitalization greatly reduces spatial and temporal constraints in economic activities, the green economy actually increases such constraints, which may cause economic agents to hesitate to enter," emphasizing, "It is crucial to consider these characteristics carefully and respond accordingly."

He also mentioned, "The post-COVID-19 era demands a major shift in our thinking," referencing Schumpeter's saying, "No matter how much you connect carriages, they will never become a train," meaning that simple changes are not enough; innovation is necessary to prepare for the post-COVID-19 era.

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